There is a new wave of capital coming into student accommodation as investors focus on the long-term fundamentals of the sector, experts agreed at the Student Housing, Micro-living and Co-living briefing which was held online at REALX.Global, the virtual trade fair organised by Real Asset Media.
‘I see more investment coming into the sector,’ said Brian Welsh, CEO, Nido Student. ‘There is a lot of life left in student housing, and from September 2021 it will be back to normal’.
Already this year there were 25 PBSA transactions between April and August, at the height of the pandemic, according to Bonard data. There are 100,000 beds coming to the market by 2022 and none of the projects in the strong pipeline has been delayed.
‘Investors remain confident and there is also more financing available,’ said Samuel Vetrak, CEO, Bonard. ‘There have been no divestments and we are seeing a new wave of opportunistic investors coming to Europe, especially from the US’.
Investors who know the asset class believe in its positive prospects, while some who do not may be deterred by the uncertainty regarding the pandemic.
Negative perceptions around Covid are incorrect
‘There is some concern among investment houses that Covid-19 has had an impact, but that perception is wrong,’ said Douglas Edwards, head of group equity raising & client services, Corestate Capital Investors. ‘If you look at the fundamentals, the reality is better than the perception’.
In almost all European countries, with the exception of the UK, demand far outstrips supply.
‘People who have had exposure to the asset class already are the most confident,’ said Vetrak. ‘Some newcomers are cautious because there is a negative perception which is not justified by the reality on the ground’.
This year’s performance is ‘in line with last year, which is remarkable considering what has been happening’, said Welsh. ‘Reality has exceeded our expectations’.
The article was originally published on Real Asset Insight (September 2020). You can read it online at the following link.
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