Neon Light Says Buy on European Student Housing Investments

According to a new Savills report into European student accommodation the sector is ripe for investment. The report, entitled Spotlight on European Student Housing 2013, analyses the investment risk of 119 cities...

According to a new Savills report into European student accommodation the sector is ripe for investment. The report, entitled Spotlight on European Student Housing 2013, analyses the investment risk of 119 cities that are home to Europe’s top tier universities, identifying ‘sweet spot’ cities, which combine strong, high quality universities, low supply of purpose built accommodation, strong demand and potentially higher returns.  The report identifies opportunities in all ten of the European countries it researched.

According to the latest data from Real Capital Analytics, the volume of student housing investment transactions in Europe increased by almost 81 per cent per annum, to reach EUR 1 billion in the first half of 2012, double that of the same period a year earlier. Savills cited a flight to quality among investors.

“Opportunities exist right across Europe, with gross yields for primary accommodation ranging from 7.0 per cent in Spain and Italy to 5.5 per cent in France, Germany and the UK, ” says Yolande Barnes, Savills director of World Research. 

“But investors need to look beyond headline supply-demand and yield indicators to fully understand market strength. The strength of individual institutions is key, in particular the ability to attract growing numbers of high achieving, internationally-mobile students. 

According to the report the UK remains top of the student housing investment tree, with 28 of the top European cities for student investment located here and most of the international students coming to Europe studying in the UK.

However, Savills cautions that increased fees, high rents and visa restrictions could pose risks, particularly as other European institutions begin to increase the number of courses offered in English to attract growing numbers of transient global students.

- Wednesday 17 July 2013

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