Student Housing in Europe 2021
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CATELLA | MARKET TRACKER STUDENT HOUSING Student Housing in Europe 2021 Source: Catella Research, Eurostat, National Statistics FIG.1: MARKET ANALYSIS STUDENT HOUSING IN EUROPE Due to steadily increasing student numbers and the widespread undersupply of affordable student accommodation, the European student housing asset class has been a growing investment market in the last few years. Despite the changes and adaptations in student life due to the COVID-19 pandemic - online courses, travel restrictions, postponement of semester dates and deadlines, etc. - the European student housing market has proved itself largely resilient in the crisis: the demand for student accommodation has not decreased significantly in 2020 and the willingness to invest has remained stable compared to the previous year. * 2018/2019 <250.000 250.000 to <1.000.000 1.000.000 to <2.000.000 ≥2.000.000 STUDENTS 2019/2020 0 to <10 % 10 to <20 % over 20 % PROVISION RATE 2.891.000 1.204.000 79.400 45.000 296.000 426.000 312.000 2.532.400 236.000 2.725.300 1.633.400 397.000 1.730.600 376.000 258.000 527.000 106.000 307.000 6 % 4 % 20 % 10 % 27 % 6 % 7 % 11 % 7.100* 15 % 9 % 6 % 8 % 7 % 8 % 11 % 10 % 11 % 22 % 8 % 8 % 9 % 20 % 7 % 12 % 12 % 10 % 22 % 26 % 9 % 6 % 12 % 15 % 12 % 13 % 53 % 12 % 14 % 13 % 9 % 6 % 16 % 5 % 770.000 282.000 FORECAST ** COUNTRY Belgium Czech Republic Denmark Germany Estonia Ireland Spain France Italy Latvia Lithuania Luxembourg The Netherlands Austria Poland Portugal Finland Sweden Norway Switzerland United Kingdom ** Forecast based on the supply/demand ratio in relation to the project development volume COUNTRY-COMPARATIVE ATTRACTIVENESS INDICATOR FOR INVESTORS National student housing provi- sion rate (in %, ratio of student figures and beds in residential halls) International students (in %) 0,0 0,0 GERMANY DENMARK NORWAY SWEDEN FINLAND ESTONIA LITHUANIA LATVIA UNITED KINGDOM BELGIUM THE NETHERLANDS FRANCE IRELAND SPAIN PORTUGAL ITALY SWITZERLAND AUSTRIA POLAND LUXEMBOURG CZECH REPUBLIC
Transcript of Student Housing in Europe 2021
CATELLA | MARKET TRACKER STUDENT HOUSING
Student Housing in Europe 2021
Source: Catella Research, Eurostat, National Statistics
FIG.1: MARKET ANALYSIS STUDENT HOUSING IN EUROPE
Due to steadily increasing student numbers and the widespread undersupply of affordable student accommodation, the European student housing asset class has been a growing investment market in the last few years. Despite the changes and adaptations in student life due to the COVID-19 pandemic - online courses, travel restrictions, postponement of semester dates and deadlines, etc. - the European student housing market has proved itself largely resilient in the crisis: the demand for student accommodation has not decreased significantly in 2020 and the willingness to invest has remained stable compared to the previous year.
* 2018/2019
<250.000
250.000 to <1.000.000
1.000.000 to <2.000.000
≥2.000.000
STUDENTS 2019/2020
0 to <10 %
10 to <20 %
over 20 %
PROVISION RATE
2.891.000
1.204.000
79.400
45.000
296.000
426.000
312.000
2.532.400
236.000
2.725.300
1.633.400397.000
1.730.600
376.000258.000
527.000
106.000
307.000
6 % 4 % 20 % 10 % 27 % 6 % 7 % 11 %
7.100*
15 % 9 % 6 % 8 % 7 % 8 %
11 % 10 % 11 % 22 % 8 % 8 % 9 % 20 % 7 % 12 % 12 % 10 %
22 % 26 %
9 % 6 %
12 % 15 %
12 % 13 %
53 % 12 %
14 % 13 %
9 % 6 %
16 % 5 %
770.000
282.000
FORECAST **
COUNTRYBelgiumCzech RepublicDenmarkGermanyEstoniaIrelandSpainFranceItalyLatviaLithuaniaLuxembourgThe NetherlandsAustriaPolandPortugalFinlandSwedenNorwaySwitzerlandUnited Kingdom
** Forecast based on the supply/demand ratio in relation to the project development volume
COUNTRY-COMPARATIVE ATTRACTIVENESSINDICATOR FOR INVESTORS
National student housing provi-sion rate (in %, ratio of student figures and beds in residential halls)
International students (in %)0,0
0,0
GERMANY DENMARK NORWAY SWEDEN FINLAND ESTONIA
LITHUANIA LATVIA
UNITEDKINGDOM
BELGIUM
THE NETHERLANDS
FRANCE
IRELAND
SPAIN
PORTUGAL
ITALY SWITZERLAND AUSTRIA POLAND
LUXEMBOURG
CZECH REPUBLIC
CATELLA | MARKET TRACKER STUDENT HOUSING
STUDENT HOUSING BEFORE THE COVID-19 PANDEMIC
- Steadygrowthofthenumberofstudentsworldwidein thelastfewyears
- Inparticular,theshareofinternationalstudentshasincreased significantlyinthelastdecade(highestincreaseofinternational studentsfromChinaandIndia)
- Consequenceofthisincreasedinternationalstudentmobility: higherdemandforstudentaccommodationandgrowing studenthousingmarket
- Worldwidetheinvestmentvolumeinstudenthousinghas increasedby135%between2014and2019
- USAandUKarethemostpopularcountriesforinternational studentsduetothelargenumberofinternationallyrenowned universities
STUDENT HOUSING DURING THE COVID-19 PANDEMIC
- Withtheoutbreakofthepandemic,highereducationinstitutions hadtoclosetheircampuses,resultinginachangetoonline education
- Ontheonehand,insomecasesinternationalstudentswere unabletoreturntotheirhomecountriesandstayedintheir studentaccommodation;ontheotherhand,therewerefewer internationalstudentscomingtoEuropefortheacademic year2020/21
- Studentmobilityhasdecreasedsignificantly,visaswere temporarilynotissued,thenumberofstudentvisashasde- creasedsignificantly:countrieswhichdependmoreoninter- nationalstudentsaremoreaffected
- 2020/21:Duetotravelrestrictionsandtheincreasedriskof infection,someinternationalstudentshavepostponedtheirstart atuniversity;however,especiallyinEurope,morehighschool graduatesachievedauniversityentrancequalificationlastyear thaninpreviousyears
- Studentaccommodationoccupancyratesdeclinedalittlein2020: Europe-wideroomoccupancydeclinewasaround10%. Duetotravelrestrictions,theoccupancyintheUKhasdropped sharply,whileothercountries,suchasFranceandSpain,have experiencedlessofanimpact.TheStudierendenwerkinGermany reportedinJuly2020anoccupancylevelbetween90and95%
- Citieswithanundersupplyofstudentaccommodationprove resilientduringthecrisis
- Theimpactofthepandemiconstudentnumbersisnotyet preciselymeasurable;however,unlikeotherformsofhousing, thedemandforstudenthousingbehavescounter-cyclically.Inthe past,ithasbeenobservedthatintimesofcrisis,studentnumbers andthusthedemandforstudenthousinghaverisen:duetothe uncertainlabourmarketsituation,studentschosetostudyasan alternativeorstudylongerinordertopostponetheirentryinto theworldofwork
FIG. 2: STUDENTS' HOUSING SITUATION (SHARE OF STUDENTS, IN %, SELECTED EUROPEAN COUNTRIES)
Source: Catella Research, EUROSTUDENT VI, 2016-2018 n student accomodation n with parents n with other person(s) n alone
HOUSING SITUATION OF STUDENTS IN EUROPE
- Livingwithparentsorwithoneormoreperson(s)arethe mostcommonlivingsituationsofstudentsinEurope
-Onaverage,17%ofallstudentsinEuropeliveinstudent accommodationandaround10%livealone
- EspeciallyintheNordics(Finland,Sweden,Denmark,and Norway),theproportionofstudentslivingwiththeirparents isverylow.Ontheotherhand,theproportionofstudentsliving instudentaccommodationisabovetheEuropeanaverage
-Therearemanyreasonsforthedifferenthousingsituations ofstudents:cultural,traditional,andinstitutionalfactors, housingavailabilityandprices,differencesintermsofincome, employment,parentalsupport,andtherespectivefamilysituation
CATELLA | MARKET TRACKER STUDENT HOUSING
FIG. 4: TRANSACTIONS IN EUROPE 2019-2020, BY NUMBER OF BEDS
Source: Catella Research, RCA
FIG. 5: TRANSACTIONS STUDENT HOUSING – PRICE PER UNIT, EUROZONE (2012-2020, IN EUR)
Source: Catella Research, RCA
TRANSACTIONS IN EUROPE
-MarketleadertransactionsstudenthousinginEurope- Volumeandnumberofbeds:UK(approx.96,250beds)
-OtherdynamicEuropeanstudenthousingmarketsinthelast twoyears(transactionsbynumberofbeds):France(approx. 9,000beds),Germany(approx.6,100)andSpain(approx.5,700)
-Thestudenthousingassetclasshasgrownsteadilyoverthe last10years,theaveragepriceperunit(i.e.perroom) increasedsince2012
- Investmentstudenthousing2020: highwillingnessvs.stagnationtransactions
300.000
250.000
200.000
150.000
100.000
50.000
0
Top Quartile Median Bottom Quartile
2012 2013 2014 2015 2016 2017 2018 2019 2020
UK
96,250 9,000
FR
6,100
DE
5,700
ES
10
9
8
7
6
5
4
3
2
1
0
Num
ber
of b
eds
(in 1
.000
)
Fran
ce
Ger
man
y
Spai
n
Irela
nd
The
Net
herla
nds
Pola
nd
Port
ugal
Belg
ium
Den
mar
k
Aus
tria
Swed
en
Italy
Nor
way
Luxe
mbo
urg
Switz
erla
nd
* UK: 96,250 beds
FIG. 3: LARGEST TRANSACTIONS IN EUROPE BETWEEN JAN'19 AND MAR'21, ALL DEAL TYPES
Source: Catella Research, RCA * the largest transactions outside of UK & Ireland
SIN
GLE
DEA
LSPO
RTFO
LIO
DEA
LS
RANKING DATE NAME LOCATION PRICE (€M)
1 May'20 IQ Student Accomodation Portfolio UK 5,540.0
2 Nov'19 Liberty Living Portfolio UK 2,205.6
3 Aug'19 Vita UK Student Housing Portfolio UK 658.7
4 Dec'19 Student Castle Portfolio UK 525.7
5 Feb'20 Harrison IRE Student Housing Portfolio Ireland 400.0
6 Jan'21 Project Harmony (2 of 8 properties) UK 362.8
12* Nov'20 Urbania ESP Student Housing Portfolio Spain 145.0
13* Oct'19 Uhub POR Student Housing Portfolio Portugal 130.0
1 Mar'19 Paul St East London, UK 186.6
2 Dec'19 Point Campus Dublin, Ireland 171.0
3 Nov'20 Cannon Park Student Housing Coventry, UK 124.1
4 May'19 Lancaster Circus Birmingham, UK 116.3
5 Jun'20 Aura Liverpool Liverpool, UK 111.2
7* Sep'19 Leonardo Da Vinci Residence Madrid, Spain 106.8
8* Jul'20 Bryggen Campus Copenhagen, Denmark 99.3
CATELLA | MARKET TRACKER STUDENT HOUSING
REQUIREMENTS AND SUCCESS FACTORS STUDENT HOUSING PROJECT DEVELOPMENTS
-Macrolocation:largecities,universitycities,citieswith tertiaryeducationinstitutions
-Microlocation: oSpatialproximitytoeducational/universityinstitutions and/ortothecitycentre
oInthevicinity/neighbourhood:localshoppingfacilities (supermarket,bakery,kiosk,...),gastronomicoffers(cafés, bars,...),localrecreationareas,sportsfields,etc.
oPublictransportconnectionswithinwalkingdistance
-Customisetheconceptanddesignofthebuildingtothelocation andthetargetgroup:individualstyle,appealingdesign,sustainable andqualityfurnishings(lowlifecyclecosts),creatinga "livingexperience"
- Architectureandinteriordesignhaveanimpactonthewell-being, healthandperformanceofstudents:integrationofsustainableand well-thought-outobjectsandroomelements(e.g.naturallight andventilation)
-Nationalcharacteristicsconcerningflatfeatures:e.g.inGermany averageareaofsingleroomsbetween20and24sqm,intheUK therearestillmanyclusterflats,inSpaindoubleroomsarecommon
- Ensurere-use/conversion/thirdpartyuse(appliestoboth spaceandfurnishings)
-Communalareas:leisureandsportsfacilitiesinthesurrounding areashouldberecordedandanalysedintheplanningprocessso thatadditionalfacilitiesinthestudentaccommodationcomplement whatisalreadyavailableandarenotplannedpasttheneed
-Considerationofthetensionbetweendemandandaffordability
COVID-19 STUDENT HOUSING REQUIREMENTS AND MEASURES
- Fastandstableinternetconnection
- Ensuresufficientspaceinstudyandcommonrooms, asthereareonlylimitedoptionstostudyoncampus
- Focusonsinglerooms:sharedroomsareconverted intosinglerooms
- Increasedfrequencyofcleaninganddisinfectionmeasures oftherooms
- Introductionofgeneralinfectioncontrolandsafetymeasures
Datenquelle: Property Market Analysis (PMA); Bulwiengesa (Riwis) Kalkulation & Design: Catella Research 2020
About CatellaCatella is a leading specialist in property investments and fund management, with operations in 13 countries. The group has assets under management amounted to approximately EUR 13 billion at the end of the fourth quarter of 2020. Catella is listed on Nasdaq Stockholm in the Mid Cap segment.
Read more online at catella.com.
Contact: Prof. Dr. Thomas [email protected]+49 30 310 193-220
Marianne Kohl [email protected]+49 30 310 193-275
FORECASTS
- Citieswherethestudenthousingmarketistight,andwith anundersupplyofstudenthousingprovemoreresilientto theCOVID-19-relatedcrisis
- Increaseindomesticandinternationalenrolmentsforthe academicyear2021/22canbeexpected(reasons:higher numberofuniversityentrancequalificationsin2020, postponementofstudies)
- Assoonastravelrestrictionsarereduced,international studentmobilitywillincreaseagain
- COVID-19short-term"interruption"oflong-termgrowth instudenthousing
Student mobility and student housing demand will increase again by the next academic year 2021/22
ASSET CLASS STUDENT HOUSING
PROS-MarketsinEuropearelargelyundersupplied
-Trendtowardssharingsocietyandon-campusliving (Anglo-Saxonstudentculture)
-Highstandardisationpossible
- Anti-cyclicalsector
- Predictableincomestreamduetosemesteroryearlyleaseterms
-Diversifiedrevenuemodel(additionalservices)
- Europe-wideincreaseinthesupplyofETP (EnglishTaughtProgrammes)
- Steadygrowthofinternationalstudents
- Increaseofhighschoolgraduationsanduniversity entrancequalifications
- ExpectationofincreaseinM&Aduetogrowingcompetition
CONS-Hightenantturnoverand,dependingontheconcept, vacanciesduringthesemesterbreakorthesummer
-Highmanagementshare
-Operatorrisk
- Increasingcompetition
- Inflationofconstructionandpropertycosts
- Veryheterogeneousinvestorspectrum: privateequityvs.publicsector
