In early 2020, the resilience of the student housing and PBSA sector was put into question: if people are not allowed to travel, how are students supposed to fill in the rooms? Will online learning make people postpone their university experience? The pandemic has cast a shadow of uncertainty in even the most stable of industries and made bespoke coherent and timely data more relevant than ever before in supporting decision-making.
By Q1 of 2021, real estate consultants and property advisors released multiple qualified reports packed with insights and market intelligence providing an overview of the real estate scenario and, more specifically, of the student housing sector. To discover what the future holds for student housing, we have selected four key industry reports and summarised the most relevant findings for investors, developers, and operators.
Our selection of must-read student housing industry reports
1. 2021 EMEA REAL ESTATE MARKET OUTLOOK — CBRE
The most recent CBRE report gives a broad overview of the real estate industry through nine chapters: economy, retails, beds, investment, logistics, data centres, offices, hotels, and operational real estate. When it comes to student housing and real estate, what is most important to mention in regards to the European economy is that after a 7.3% fall in GDP in 2020 alone, a 4.6% recovery is expected in 2021. Furthermore, monetary policy in the EU should remain ultra-accommodative for at least the following three semesters, reassuring investors and developers.
According to the CBRE market outlook, student accommodation in 2021 will continue to endure cost and operational challenges. It is expected that operators will reduce expansion plans and focus on their current assets. In the short term, this might reduce supply, but as the student housing market needs are inherently strong, the demand for PBSA should continue to surpass the offer in the next few years.
Read the full report by clicking this link.
2. OUTLOOK 2021 — BUILDING RESILIENCE IN GLOBAL REAL ESTATE PORTFOLIOS
In its 2021 Investment Management Outlook report, Savills presents its perspective on the commercial property markets. After performing an industry survey, Savills found that 45% of investors expect real estate investments to grow in the course of the following 12 months. About 25% of investors believe the investment will remain at the same levels as now.
As the market adopts prolonged lower-for-longer interest rates, yields are depressed and investors' options to meet return targets are limited. For Savills, a possible answer to the challenges being faced by financial markets is betting on alternative real estate asset classes such as student housing and PBSA. With traditional property assets (office, industrial, and retail) interest rates at their lowest, alternative sectors can deliver more appealing risk-adjusted returns.
The report states that residential, specially built-to-rent multi-family and student accommodation, healthcare, and senior care facilities, are generating long-term, stable income returns. Furthermore, alternative sectors such as PBSA offer more advantages over traditional property assets than higher returns: they also allow investors to diversify risk given their counter-cyclical nature.
While pondering the effect of the pandemic on the student housing market, Savills expresses a belief in students going back to university campuses, since social interaction and in-person learning offer the highest value of the academic experience. Moreover, the PBSA offer in Europe still does not match the market demand, making student housing an attractive opportunity for long-term investors.
Read the full report by clicking this link.
If you would like to continue reading the full article and learn the key takeaways about the other two student housing reports by Knight Frank and BONARD, click on this link.
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Originally published at www.spatial-experience.com.
