Global student enrolments reached just over 207 million during 2014 academic year, recording an average 3.8% growth p.a. for the past five years.
The OECD anticipates higher education enrolment numbers to swell to 263 million students by 2020. However, the graph to the right takes a more conservative estimate of the historical growth rate (3.8% p.a.).
Headroom gap in top higher education destinations
Top Higher Education (HE) destinations are significantly under-supplied in purpose built student accommodation
This graph shows how Purpose Built Student Accommodation (PBSA) is significantly under-supplied:
- US: Among 20.6m total enrolled HE students, only 12% live in PBSA beds
- Similar situations can be found for all major HE destinations such as UK, Germany, France, Spain and Australia
- Germany’s potential headroom requirement is close to 90% while Australia’s potential is at 93%
Global investment into Student Accommodation Sector
Over the past 5 years, purpose-built student accommodation (PBSA) has continuously grown, with global transactions consistently above $6 billion. As the US has attracted the most capital into PBSA, the UK has also seen increasingly high and attractive investments into the sector. In 2015, Australia saw over AU$1bn committed/invested into PBSA through direct transactions, joint ventures and partnerships.
Historical occupancy of PBSA vs other real estate sectors
PBSA has remained one of the strongest sectors in real estate, maintaining and outperforming traditional sectors of Office, Retail and Industrial. Its remarkable resilience throughout even the great financial crisis has kept occupancy at an average of 95% over the past 10 years. Long term demand is underpinned by government policies (globally) to promote increased participation in education.
Historical Rental Performance
From the 1980’s PBSA’s rental performance, primarily university accommodation, has not only displayed stronger growth when compared to the IPD All Rent Index, it also shows how student rental growth is non-cyclical. Overall PBSA has historically shown a strong consistent track record, where from 2001 PBSA rental growth outperformed all other real estate sectors.