The student housing market is going through a particularly positive period, as shown by investment volumes, which in 2021 reached a value of €5.2 billion in Europe. This is according to the latest analysis by JLL.
Student housing in Italy and Europe
According to the findings, England is confirmed as the favourite destination, receiving 60% of investments, followed by Germany (11%), Switzerland (9%) and Denmark (7%). In Italy, the number of university students in the academic year 2020/2021 has reached around 2 million, with a strong increase in international students especially in the cities of Milan and Padua.
"Despite the need to adopt distance learning solutions and the repercussions of the pandemic on the demand for beds in university cities, the student housing sector is showing remarkable resilience, so much so that we expect the market to grow." said Antonio Fuoco, Head of Living Capital Markets at JLL Italy. "Over the next two to three years we expect to see an increase in investment volumes; by 2024 we anticipate a volume of around €1bn in the Italian market, thanks to the increasing internationalisation of our universities, attractiveness and quality of services in major Italian cities."
Student beds in Italy
The number of student beds has currently reached 62,000 and by 2024 an increase of over 16,000 is expected, 45% of which are already under construction. Half of the projects are currently being developed in cities such as Milan and Turin, but it is expected that in the next 3 years other locations will become increasingly important, in particular Florence, Bologna, Padua and Rome. Bologna is the city with the highest potential demand for beds (25%), followed by Rome and Milan (20%).
Investing in student housing
At a national level, the student housing sector is proving to be an asset class in strong evolution, with high investment potential and geographical diversification. Although transaction volumes are still low, the attractiveness of the sector is confirmed by the increasing number of developers, players and market operators - including The Student Hotel, Camplus, Campus X, Aparto, CRM and Dove Vivo - who are considering implementing new management solutions. By 2024, 50 new student residences are expected to be opened.
The high appeal of this asset class in the Italian context led to a compression of net prime yields, particularly in Milan, where the prime yield reached 4.90%.