Student Housing
Building over-priced micro apartments becomes a trend amongst global investors
In the busiest cities of Europe, a curious trend began to emerge – short rental micro-apartments appeared as the most promising investment opportunity for corporate landlords. With a constant stream of students flooding into these urban centers, demand for accommodation exploded, driving rents to its highs. No wondering, many of these students found themselves unable to afford housing, often relying on parental support. In Dublin this year, first-year students set up tents on campus before the start of term. In Bologna, at Europe’s oldest university, they spent the first few nights at the station again out of necessity.
At the same time the universities, burdened by limited capacity in their dormitories, struggled to provide adequate housing for their students. That is how many young people found themselves still living in their family homes, unable to fully embrace independent living.
Enterprising investors misused the situation and jumped on the opportunity, capitalizing on the demand for short-term housing solutions, offering fully furnished flats tailored to the needs of the young newcomers. These micro-residences proved to be highly profitable, even more than traditional long-term rentals.
Great Britain is a pioneer of the trend, as well as a home to the largest investors in the student residence market. Europe’s largest provider, Unite Students, part of The Unite Group, is a company founded in Bristol that manages almost 75,000 beds. This is followed by the London companies University Partnership Program (42,000 beds) and iQ Student Accommodation (32,000), the latter is owned by the Blackstone investment fund, which also owns thousands of apartments in Berlin.
Our data showed, for example, that Paris holds the top rank among student cities, followed by London and Madrid. The highest proportion of students can be found in Leuven, Pisa, and Milton Keynes. There has been a sharp decline in cities in Eastern Europe.
