Student housing continued its record growth last year, recording over €9bn across 105 international transactions, excluding the US, according to new research published by market research and advisory firm BONARD. As student numbers are growing faster than supply, the asset class remains a top-4 sector prospect for investments in 2020.
Average transaction yield rates ranged from 3,7% to 6%, with takeovers of the Atira, Liberty Living and Urbanest portoflios among the largest deals. Demand is being driven by the constant growth in mobile and international student numbers and is growing faster than in other asset classes even during economic downturns, making it a counter-cyclical asset class.
To date, the sector has seen the involvement of over 700 companies. In continental Europe and UK alone, 142 PBSA projects and 43,655 beds were due for completion in 2019. ‘The student housing asset class has been maturing to a stage of transparency, returns and liquidity that offer sufficient security and confidence for many private and institutional investors,’ says Samuel Vetrak, CEO of BONARD.
Student housing continues to rank high as a sector prospect for both investment (4th) and development (9th). A pipeline of new projects in continental Europe and the UK will bring 338 private PBSA projects (with 130,678 beds) onto the market in the next 2.5 years, while details to additional 320 announced projects (representing 91,636 beds) remain undisclosed.
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