Despite Covid, student housing has a bright future in Poland

In recent years, Poland has become a key area on the European map of private student housing. The main factors of growth are easy to guess: the size of the country, a growing number of students and a low number of existing investments of that type. „First of all, lack of proper supply. Poland is actually the sixth European country in terms of the student population. Secondly, we see that the number of foreign students is increasing. Even in last year, when it was just one digit increase - but students are still coming both for long term studies and also for Erasmus. It's also worth mentioning, that Erasmus for the next five years will double its financing for a program, which means that there will be even more foreign students. For them, purpose-built student accommodation is an obvious choice. Moreover, what we see is that thanks to active sales activities of all operators, product awareness is arising. The students are aware that this kind of accommodation is available. And finally, it is also important to mention the last report of the Polish Bank Association, saying that the average spendings of students are rising each year in Poland. According to that report, it was a 70% increase in the last five years”, said Tomasz Paszkowski, Investment Manager of Basecamp Student.

„I think the combination which makes Poland attractive is the size of the market - you have many cities with 100,000 and more students. But the other thing attracting the investors is the very good quality of the constructions delivered,” added Harald Hübl, Investment Director of value one holding AG

Marek Pyra, Finance Manager of Zeitraum Student Housing also pointed at attractive yields. „In Poland, yields are much higher than in Western Europe. The risk is, of course, also higher than in the West. But still, yields remain very attractive for the investors and that's why a lot of capital is coming here right now. We are focusing on the biggest cities because there's the potential for the students. In the Czech Republic, we have Prague, we are also looking at Brno and Ostrava. But all these cannot be compared to, for example, Kraków, Wrocław, not mentioning Warsaw. And others cities are following, like for example Lublin – another bigger city, with not so many players, The students are looking for private student housing offered by the professional operators, because they like the stability of the standardized contract. Everything is taken care of - you don't have to take care of utilities, everything is managed by the house manager, by the dormitory itself. It's very, very convenient for the students”.

Did covid-related turmoils affect the student housing market, like it was in the case of hotel properties? Did it force the operators to change their offer? „Our product turned out to be covid-proof. Our offer is mostly single rooms. Of course, we had to limit it a little - we had to close some common areas, common kitchens, so it was quite problematic. But also during the covid, we discovered that some students, especially from Medical University, liked studying together – online, but together - to have a better understanding of what's actually going on. After all this friction was gone, we could open all our common areas, so everything was like before; they still wanted to spend a lot of time together in common areas having parties, watching football games or learning etc. So yeah, I think that it only proved that single rooms are at this moment the best for students in Poland”, said Tomasz Paszkowski.

Covid had no impact on the rents in the private student dormitories, but according to operators, the increases are inevitable. „We simply have to increase the prices. Just look at the inflation rate and skyrocketing energy prices”, said Marek Pyra. His opinion was shared by Tomasz Paszkowski: „There is another way than to apply higher rents. On the one hand, we have inflation. On the other one, surging construction costs. In the last 24 months they increased so dramatically, that actually probably everyone has to look for some optimization solutions in terms of design”. Also Harald Hübl agrees, that rising costs will have to be compensated by higher rents: „What I see on the horizon are the cost increases. Yes, we can compensate energy costs to some extent by being more efficient. And by educating our students as well. How many students know, how much water they require for a shower and that it makes a huge difference in cost overall?

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