The impact of Covid-19 on the purpose-built student accommodation (PBSA) asset class has been less severe than expected, proving the resilience of the asset class, as shown in the highly-awaited Student Housing Annual Report 2020 released by BONARD, a market intelligence and advisory firm specialising in student housing and rented residential asset classes.
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Key report findings
Most students have returned to campuses
BONARD’s study reveals that private student housing providers created exceptional Covid-19 contingency plans, secured their premises and offered reassurance when both students and parents needed it most. The pandemic saw demand shift to non-shared units, with some operators renting double rooms as singles to comply with regulations as well as to meet student demand.
Occupancy rates higher than expected
Compared to original expectations of a downflow in occupancy of at least 20%, in fact decreases of 10% or less have been seen in most countries. While most private student residences in the UK, the Netherlands, Germany and CEE have been reported as reaching 90% occupancy levels, and France, Italy and Spain have maintained levels closer to 80%, a few individual cities, such as Madrid, Barcelona and Dublin, have dropped to 50–60% occupancy.
Pipeline: 79% of PBSA assets that were due to open in 2020 did so
Monitoring new developments in student housing during 2020, as well as those set to open over the next few years, BONARD has noted that the standard pattern of market development has continued even during the Covid-19 crisis. Upcoming student housing projects in Europe and the UK, both under construction and in planning, will offer over 200,000 beds.
Transaction volume did not change significantly compared to 2019
2020 saw a reasonable level of student housing transactions, with its total value for continental Europe and UK combined reaching almost €9 billion. In continental Europe, the pace of market activity was consistent with the transactions volume in 2019.
Investments set to grow in years to come
Investor interest in this asset class has remained high. A survey conducted by the GRI Club in October 2020 revealed that 65% of relevant investors intend to invest more, 25% have put their investment plans on hold and 10% have considered divesting.
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BONARD is a market intelligence and advisory firm specialising in student housing and rented residential asset classes.
Our team of 40 researchers and analysts operating in four offices around the world provide the highest level of secondary and primary in-field data and research (street level/ground interviews) and assess strategies and opportunities for student housing, micro living, co-living and other alternative residential sectors.
The team collects and analyses data from 130 markets and submarkets, covering 7,000 PBSA assets owned or managed by private, public and religious organizations, about 1,000 new developments currently in the pipeline, completed transactions and upcoming opportunities.
All our data is independent, certified and delivered in timely fashion to support the decision making of our clients and partners, who include more than 40 governments, hundreds of universities and over 700 investment groups engaged in student housing.