The European Student Housing sector has seen record levels of global institutional investment as investors seek to diversify into alternative property assets.
Despite increases in the cost of higher education and concerns about the levels of student debt, it is clear that students across Europe still see the value of a university degree and the majority of students will study away from their home regions. UK universities particularly continue to recruit an increasing number of international students, making up over a quarter of the UK student population. As a result, student accommodation has evolved into a mature and established asset class in the UK, and growth in the sector has been exponential.
An attractive feature of the student accommodation market is its countercyclical quality, as the demand for education is both steady and inversely linked to economic cycles. Many investors are also attracted to the more consistent cash flows offered by student housing, and the lower covenant and income risk compared with traditional commercial real estate.
To date, capital flows for student accommodation has been concentrated in key markets in Europe, with just over half of investment inflows in the UK and Western Europe. There is significant growth opportunity in the asset class in underserved European cities, particularly in Southern Europe which remains significantly underserved. Undersupply coupled with growing global demand for higher education amid shifting demographics and wealth distribution, points to a thriving student housing sector across the continent for the foreseeable future. Key-Vest offers investors access to institutional grade Student Housing investment opportunities across Europe. Click here for more information.