With these points in mind, this articleaims to present emerging trends in student housing based on market demand and student preferences. Operators need to prepare for sudden changes in the leasing patterns of student housing units amid the pandemic. Copenhagen University has comfortably positioned itself as one of the best universities in continental Europe, even reaching pole position in CWTS Leidens 2021 Ranking. Nevertheless, pricing remained resilient, explained Marin-Bataller. More graduate students look for on-campus housing. From regular company reports to up-to-the-hour news on share performance, key financials and corporate governance developments. Using apps to make requests for services remotely and to communicate in real time 24/7 is one of the things students value most. In Bonards reckoning, there are very few destinations across its 270-city sample, that could be considered saturated in terms of student housing beds. The U.S. student housing market: Overlooked opportunities. The research team estimates that, as of September 2021, there were roughly 230,000 beds in the PBSA pipeline across Europe, including both facilities under active construction as well as those still in the planning stage. Additionally, expensive and amenity-rich housing has been identified as one factor that contributes tohigher vacancy rates in newer developments (Meuller and Havsy, 2020). Typically, that market is one in which there is a substantial growing student body and where the property is located in close proximity to the campus. Meanwhile, as investors shuffle their real estate deck, more and more student investment opportunities are likely to appear elsewhere in Europe. Use your network: Dont forget to ask around, as chances are you know someone who knows someone who is looking for a housemate! Blackstone formed a $784 million joint venture with Landmark Properties to invest in eight student housing properties totaling 5,416 beds across the U.S. Encouraged by the ongoing favorable macro trends in the sector, Brookfield partnered with Scion to acquire a U.S. student housing portfolio of 27 properties with more than 17,000 beds in close proximity to large, public universities. When the majority of on-campus housing is converted to single-occupancy rooms, this can result in a 20% to 50% de-densifying of the campus (Pierce IV, 2020). Additionally, foreign investors are also expanding their U.S. holdings. Like what you're reading? In other words, were entering a market that has supply deficiencies and economic support and is also attracting an international audience.. However, even with the increase in globally active capital, both institutions of higher education (IHE) and the private sector are still unable to supply enough accommodations to meet student demand. Oversupplied markets that were counting on increased enrollment activity to offset supply-demand imbalances saw enrollments flatten or even decline at certain schools, which consequently impacted occupancy and rates, Kirby mentioned. Moreover, the Danish student sector received substantial government financial backing during the corona pandemic, commented Marin-Bataller. Major European cities such as Berlin, Madrid, and Paris will have a supply gap of 100,000 beds in 2021, while the number of full-time students in the UK outweighs available beds by approximately 3:1. This is why one could say that off-campus housing was more prepared to face the pandemic with their unit types. The company is also investigating opportunities in Italy, Spain and the Netherlands. PATRIZIA SE, Data Protection Information for Applicants, Interim Statements and H1 Financial Reports, Manager's Transactions (Directors' Dealings), Remuneration systems for Management Board and Supervisory Board, Login Infrastructure (Whitehelm Client Portal), Compliance disclosures of our subsidiaries. Here is a list of cleaners and cleaning services in Germany! This once again is a testament to student housings continued resilience, which we expect will lure investors back as the sector continues on its trajectory of increasing institutionalization and maturity, Rosenberg said. In Europe, there are over 2 million international students. GenZ is more independent in their learning style, but they want to be in a communal space, not isolated. That resurgence of bookings was driven in part by a double cohort effect as students who had deferred their studies in 2020 with the onset of the pandemic then moved to begin or resume their programmes in 2021. But by 2010, 2/1 units had almost entirely disappeared and were replaced 2/2 or 1/1 units (Meuller and Havsy, 2020). If you will only be staying in Germany for a short amount of time, you might consider short-stay accommodation for maximum convenience and minimum fuss, as short-stay properties will be fully-furnished and the rent will include all costs for utilities. 177-202). Moving to Germany? Washington, DC: McClure, K., Ryder, A., & DeVita, J. Get the facts: pricing, rental contracts, tenants' rights, Wohnungsgeberbesttigung, rent benefit & reasons to rent. Most universities in Germany offer several halls of residence for their students. The U.K, for example, has a 6% year-on-year increase in international student applications for 2019-2020, while Australia has seen a 118% increase in applications for a higher education visabetween 2010/11 and 2016/17 (Knight Frank, 2019). Although universities in Germany offer student accommodation, demand far outstrips supply, so many students choose to rent privately. This transaction is significant as it marks the largest student housing portfolio deal in Denmark to date. To be on the safe side, international students should start looking for an apartment or room as soon as possible. Bonard notes as well that private housing providers fared better during the pandemic, in terms of occupancy rates and overall performance. If youre looking to save costs, taking a room in a flatshare (Wohngemeinschaft) is usually a very affordable option (and a great way to practice your German!). All seven are either newly built or set to be completed this year and lie within easy walking distance of the university, local amenities and transport links. If youre looking for ease and simplicity, university accommodation is probably your best bet, as it can usually be sorted out well in advance of your arrival. For instance, a subsidiary of Asian real estate giant CapitaLand Investment Management paid $83.3 million for Seven07, a student housing community serving students enrolled at the University of Illinois at Urbana-Champaign. Everyone in the market says that student housing is a great place to fish. Whitford, E. (2020, April 6). As per CDC guidelines, most student housings have closed property amenities, suspended work at on-site offices of residents, canceled special events, and began virtual tours of units, among others. The top reasons that graduate students cited on why they would like to live in on-campus housing includereasons related to transportation,access to campus resources, and financial reasons (Princeton University, 2017). 2022 PATRIZIA is also developing a business plan for the Italian student housing sector, which remains as yet untouched. Be cautious: Unfortunately, there are quite a lot of scammers out there targeting international students. For example, Monarch Heights, a 154-bed recently completed student housing asset near Columbia University in the city of New York, changed hands for $84 million or roughly $550,000 per bed, marking the second-highest per-bed price ever recorded, according to Todd Rosenberg, managing principal & co-founder of Pebb Capital. And with the student housing sector proving its resilience during the height of the health crisis, large institutional investors have taken notice. Both online and in-person classes will be part of students lives, and as long as theres a traditional in-person college experience, demand for student housing will be unaltered, Druey noted. Want to rent, buy or sell residential property in Germany? Dordrecht, The Netherlands: Kharas, H. and Hamel, K. (2018, September 27). Jim Kirby, executive vice president of acquisitions at GMH Communities, noticed that in markets where schools had a high international population, enrollment numbers declined due to travel restrictions and student-visa issues. This challenge will likely continue into 2022, Druey told MHN. ICEF Podcast: What can student accommodation bookings tell us about the year ahead? Operators prepare for volatile leasing rate. ), The Measurement and Analysis of Housing Preference and Choice (pp. Did you enjoy this article? Finally,educational institutions, developers, and private investors need to carefully study the student demographics of each location in order to provide the most appropriate accommodations to students at an affordable price. Properties that are within a half-mile to one mile from campus are pre-leased53.2%, while units that are over one mile are pre-leased 52.9% on average (Bunch, 2020). Looking for a professional to help you out with cleaning your house and/or office? Moreover, heavy equity demand and compressing yields in the residential sector, coupled with potential increases in interest rates, are further encouraging institutional investors to move away from residential and instead pile into alternative forms of living, such as student apartments, senior living or micro apartments to diversify their portfolios and to enhance their returns. Aware of its attractions, an increasing number of international students are flocking to the city. Two countries with a huge middle-class populationChina and Indiaare also the top two sources of international students for the US with369,548 students, and202,014 students, respectively, in the academic year 2018-2019 (IIE, 2019). Brexit has also impacted the sector as European students start to shun the UK and seek alternative universities in continental Europe to avoid paying full international fees and stop meeting complicated visa and entry restrictions. Student housing is becoming a global asset. Then dont miss the next one! Theres just one drawback: the severe shortage in student accommodation. Surprisingly, even after the outbreak and school closures, many student housing operators reported that more than half of their tenants remain on site. Aside from the supply shortage, developers and investors need to consider other issues like affordability and changing student preferences when constructing or renovating on-campus accommodations and student competitive housing. Many private housing providers in Europe, for example, registered only about a 5-10% decline in bookings in 2020 (a much more modest decline than was being reporting in other travel and hospitality sectors that year). If you live with German roommates, you can practice the language as well. In fact, several academic institutionsDuke University in North Carolina, Stanford University in California and Columbia University in New Yorkannounced in early January that they would begin the semester remotely due to concerns about the fast-spreading omicron variant. Since the middle class tends to invest more of their income in education (Kharas, 2017), we can assume the continuous expansion of higher education facilities, including the requirement for accommodations. Subscribe. Universities, as well as private owners, can be in a better position to attract tenants and reach full occupancy for their units if they are able to provide low-cost conveniences, such as groceries and food through mixed-use student housing. You will need to apply in good time, either through your universitys international office, or directly through your local branch of the Studentenwerk. Check out these real estate agents! But as digitally engaged as this generation is, they still value in-person communication, Wuennenberg said. Please click the link in the email to confirm your subscription. This brings PATRIZIAs investment in student housing to a total of 435m over the last 12 months. However, newer student housing in the U.S. is less likely to offer double occupancy. Student competitive housing properties that are within a half-mile from campus are pre-leased 61.9% on average and tend to outperform properties that are farther away. Unlike other countries such as the UK or Ireland, Denmarks student housing sector provides an additional layer of security: it offers a flexible use class, which incorporates residential use. Source: Massification of Higher Education. This can usually be done online. You might consider enlisting the help of a rental housing agency in your search for student accommodation in Germany. Meanwhile, the middle class has become the largest socio-economic group in the world today (about 4 billion) and is projected to have a total population of5.3 billion by 2030, which will represent some two-thirds of the worlds population (Kharas and Hamel, 2018). Demographic changes fuelled by urbanization are adding to structural shortages in purpose-built accommodation, as more and more people flood to big cities and choose to stay longer in education. Public-private partnerships in college student housing: Lessons from three institutions. Drawing from these data, we can imagine why more students will naturally look for affordable accommodations. Find apartments, rooms and houses for rent in Berlin, Munich, Frankfurt, Cologne, Hamburg and all over Germany. Research.com uses the information to contact you about our relevant content. The property is Ascott Residence Trusts fourth acquisition since entering the U.S. market a year ago. Another trend to watch going forward is the green movement advancing into the area of health and wellness. This shortage is also a pressing concern in Europe, U.K., Australia, and India. (2020, January). Colleges continue to churn through refund plans. Student housing demand shifts to private rooms as sector adapts to pandemic. They can be graduate students taking their masters or doctorate degrees. We do not expect room sharing to completely disappear; however, trends suggest that units that provide more privacy are becoming the residence of choice among students. The issues of affordability and shortage of supply can be addressed by increasing the bed capacity per housing unit. PATRIZIA is moving strongly into the student accommodation market with recent purchases of assets in Copenhagen, Hamburg and Dublin. The rising middle-class is fuelling demand for services and goods in all industries, including education. Never pay any money upfront, wait to see the property and sign the contract. Fry, R. and Cilluffo, A. Scheduled for completion in autumn 2024, Urban.Isle Campus is aimed at students and young professionals and will provide c. 10,100 sq m of residential rental space across 469 fully-furnished, high quality micro apartments, with an average size of 23 sq m. Nathalie Winkelmann, Head of Fund Management Residential at PATRIZIA, commented: This transaction has allowed us to acquire a high quality residential property with a futureproof concept that taps into the demand from students and young professionals for micro living accommodation with excellent transport connectivity., Louise Hertz, Country Manager, PATRIZIA Denmark. In the U.S., approximately 8 million students need student housing near campus (Meuller and Havsy, 2020). Six of the assets are located in central Copenhagen, while the seventh is in Aarhus, Denmarks second largest city. There are usually several types of accommodation available to suit all preferences, from 1-bedroom apartments to flatshares of up to 20 students. Third, though many universities lost revenue as they had to close on-campus residences and refund room and board (Whitford, 2020), the survey tells us that operators are still optimistic. A new building with 141 modern and fully furnished residential units is being built in the district of Othmarschen under the banner Campus Hamburg. The same preferences can be seen inEurope, the U.K., and Australia. Students look for affordable accommodations with functional amenities. In addition to subsidised university accommodation, there are a great number of housing organisations in Germany that cater specifically to students. The preference for single occupancy and equal bed and bath parity can be attributed to an increasing appreciation of privacy among students. The Bonard report looks at sector performance as of September 2021 and by that point many PBSA providers had seen bookings return to pre-pandemic levels. The 40,500 sqm sale includes 1,186 beds, dedicated social and study spaces, as well as additional commercial space of 3,800 sqm. Demand for student competitive housing rise during the fall semester. This was a popular trend 15 years ago, but Wuennenberg believes it might return as it provides both privacy and safety. A leading partner for global real assets. A global tipping point: Half the world is now middle class or wealthier. The overall finding of the Bonard report is that the PBSA sector has been very resilient throughout the pandemic. First, student housing demand will continue to rise as the world population of college-age students also increase, and middle-class families invest more of their income in pursuing higher education. Read our advice for renters and buyers on setting up home utilities, cold versus warm rents and what's included in Nebenkosten. Images:svetikd, Instone Real Estate / moka-studio. McFalls, J.A. They are the most diverse and most well-informed. This is why having a strong online presence and understanding students exact needs is crucial for housing providers. Many have properties suitable for students and can save you a considerable amount of time with your search. Thus, there will be disparities in student housing demand based on location and demographics. Nijnstein et al (2015) argue that there are considerable disparities in the housing choice behavior of individuals. Be social: Living in shared accommodation can be a great way to meet people at the beginning.