The Student Housing Annual Report 2020 research, released by student housing market intelligence company Bonard, is based on research on more than 7,000 purpose-built student accommodation (PBSA) sites as well as 1,000 new developments.
Despite initial fears of larger decreases, occupancy rates of 90 percent or higher were recorded for PBSA in the UK, the Netherlands, Germany and Central & Eastern Europe, while France, Italy and Spain maintained levels closer to 80 per cent.
The PBSA operators created exceptional Covid-19 contingency plans, secured their premises, and offered reassurance when students needed it most. “As a result, most students have returned, revealing a widespread desire to continue the university experience even when courses are blended or online,” said Samuel Vetrak, CEO of Bonard.
79 percent of PBSA developments that were due to open across Europe in 2020 did indeed open, and delays for the remaining 21 percent were not necessarily related to the pandemic.
Meanwhile, student housing projects under construction or planning across Europe and the UK will deliver an additional 200,000 beds to the market. The Irish capital of Dublin is set to receive an additional 6,863 beds from projects in the pipeline, while Porto (Portugal), Seville (Spain), Paris (France) and Amsterdam (the Netherlands) will all receive an additional 4,000 beds from current schemes.
The value of student housing transactions across the UK and Europe reached €8.9 billion in 2020, an increase in activity compared with the previous year (€7.8 billion). The largest single deal in 2020 was Blackstone’s acquisition of the IQ student accommodation portfolio in the UK for more than €5 billion.
“Student housing has proved itself a resilient, low-risk defensive asset class with a counter-cyclical nature. To date, the PBSA asset class has attracted more than 700 companies globally, with more expected to enter the sector in the coming years,” said Samuel.
Research on the supply/demand dynamic in several European study destinations in the report shows that the UK still leads in terms of PBSA provision, with a ratio of two international higher education students per PBSA bed in London, compared with Berlin (six) Rome (13), Paris (16), Copenhagen (25) and Warsaw (28).
London remained the most expensive capital city in Europe for PBSA, but Rome had the largest increase in average rent during 2020 at 5.6 percent, followed by Paris (4.7) Aachen (4.4), Amsterdam (4.2), and Berlin (four).