Student accommodation has been one of the most successful new options for investors and developers in Western Europe to consider over the past ten years. We believe the next ten years will see this new opportunity, alongside its residential peer sectors such as micro living and senior housing, spread into the CEE region.
The present supply of private purpose-built student accommodation (PBSA) in seven cities in the core CEE-6 markets is limited to 20 assets, with another eight under construction. A lack of affordability, the availability of very cheap but low quality private houses and state-owned dormitories and tight university budgets have stymied development in the past. A key demographic shift, with international students becoming an ever-higher proportion of the resident population is shifting expectations and perhaps affordability slowly towards international norms.
We assessed the potential demand over the next ten years via the expanding number of international students, through extrapolating recent growth trends. We calculated various demand scenarios, ranging between just 10% of international students looking to rent a bed in a unit, to half of them deciding to do so.
