Pandemic did not stop Student Residences’ investment

Pandemic did not stop Student Residences’ investment

This information was provided by Samuel Vetrak, Bonard’s CEO, who assumed that until now «there have been no divestments, which shows that the counter-cyclical, defensive nature of the sector is playing well with investors». His latest research revealed that «the sector’s fundamentals are all still in place» and, in fact, «two-thirds of stakeholders continue to seek opportunities and pipeline projects continue as scheduled, with over 80% on-time».

The cautiously optimistic sentiment concerning the future of student residences is shared by the experts who met last week for the webinar Real Asset Media’s European Outlook: Student Housing investment briefing, who further recalled that a few months ago, with lockdowns in place and blanket travel restrictions across the globe, prospects looked bleak.

Now Luke Nolan, Founder & CEO at student.com, assumed that he feels «much more positive now than I felt back in March. Bookings are strong across the board, at around 80-85% of the original target, which is significantly better than we expected, but we are concerned about cancellations». Samuel Vetrak also assumed that «international students want to resume or start their studies, the problem is not lack of demand but rather difficulties travelling or visa restrictions».

Impact on the sector varies from country to country

Although resilient, the student residences segment was not indifferent to the pandemic’s severe effects. The experts consider that its impact is and will be different from country to country.

«From a global perspective we’ll see shifts in destinations and Canada and Europe will emerge as the biggest winners», said Samuel Vetrak. «Canada will benefit from the decline in the US, while within Europe the UK, Germany, France and Poland will remain strong, Spain will regain its position and Italy will keep rising up the ranks», he added. According to Luke Nolan, «globally it’s a mixed bag of news but Europe is having a really positive time compared to the US or Australia».

The German market might be one of them, since «in Germany, the PBSA market is very resilient», said Lambros Reppas, Asset Management, Micro Living & Residential, CORESTATE Capital Group, who stated the German market dropped only around 4% in terms of occupancy. On the other hand, Lambros Reppas remarked that it is currently «an expensive market and returns are low». According to CORESTATE Capital Group’s representative, «Poland is more affordable and it’s a good place to invest now across the board, from student housing to co-living to services apartments».

The search for opportunities continues. «We’re looking at many new markets, like France which is very interesting», said Rob Waterhouse, Head of Transactions, Global Student Accommodation. «As for the UK, we believe that the decline in the number of Chinese students will be offset by an increase in domestic students and the market will prove to be resilient».

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