Student Housing: Investor Safe Haven in a Political Storm

What was once considered niche, has been reported as the number one choice for investors, according to the latest “emerging trends in real estate” report by PWC and ULI....

What was once considered niche, has been reported as the number one choice for investors, according to the latest “emerging trends in real estate” report by PWC and ULI. As the leading think tank in student living in Europe, The Class of 2020’s presence at MIPIM used to be a bit curious. Four years ago, student housing was not something that drew crowds, but this year, with an attendance of more than 100 people, our student housing investment briefing hosted at the JLL marquee at MIPIM showcased the increased interest in the sector.

Our experts engaged in a panel discussion focused on the effects of political uncertainty on student housing investments. Panelists agreed that Brexit, the recently elected Trump administration, and the ongoing European elections will without a doubt affect investors’ decisions. However, it is still unclear to what extent.

Philip Hillman, chairman of alternatives for EMEA at JLL, said: ‘It is an exciting time for investors in student housing across Europe. Investors are now looking towards continental Europe for stronger returns’. Hillman presented JLL’s latest research on the European student housing market, highlighting the latest trends in European student housing investments.

MPC Capital’s Rainer Nonnengasser outlined the investors’ focus on ‘safe-haven’ regions such as Germany, putting quite a bit of pressure on the market there, and making it increasingly difficult to secure desirable development sites. MPC launched its first residences under the Staytoo brand in Germany, and is planning to expand to Portugal. The Portuguese market is on the to-do list for Round Hill Capital as well, with COO Paul Bashir predicting 20,000 beds by 2020 around Europe.

Naturally, expansion strategies are on everyone’s agenda, a development that will further increase the stake of this market on the overall housing demand. Charlie MacGregor, CEO of The Student Hotel has recently announced three new projects in Rome, Madrid and Delft, and aiming to reach 17,500 beds by 2021. Comparatively GSA is going global, with Head of Investment Management EMEA Derek Williams talking about their recent entrance in the Japanese market for a student house in Tokyo. Similarly, Keith White announced that CRM is also ready to go beyond the UK borders and expand their projects to the rest of Europe, with projects already underway.

BIG AMBITIONS in student accommodation:

We asked the panelists what topics would be on top of their agenda to bring into The Class Conference in Lisbon. Most important were developments like co-working and co-living spaces. They predicted the future to be all about the shared lifestyle – an accommodation suitable for “generation nomad”, a target group that goes far beyond students. The concepts of compact living and micro living will be brought forth by innovations in room types and an increased mobility. This forward-thinking way of life will be reflected in cosmopolitan communities which will inevitably be defined by their homes.

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