Osborne Clarke investigates at its roundtable discussion in Brussels
Here at Osborne Clarke we have been working with our clients in the Student Accommodation sector for over 15 years. In that time we have seen Student Accommodation in the UK evolve into the institutionally accepted asset class it is now.
Last week (15 October) Osborne Clarke’s Brussels office hosted a roundtable discussion to analyse the opportunities offered by the rapidly growing Student Accommodation markets in other European countries with particular regard to what has already been achieved in the UK market. Osborne Clarke Real Estate partner, Christine Flion opened the discussion which was attended by a wide range of people including investors, developers and real estate agents. The event proved to be a valuable chance to exchange ideas and insights about the future of student accommodation in different European jurisdictions. Our chart comparing key risks and opportunities for Student Accommodation across several jurisdictions was particularly useful basis for discussion. Osborne Clarke’s David North and Casper Bos provide an opinion and some highlights from the discussion below.
The current position in the UK and elsewhere in Europe – David North, Partner
Direct investment in the UK student housing market has risen from £274m in 2010 to an expected £5.7bn this year. The appetite for this asset class goes unabated and at the moment shows no let up.
That said, as student numbers rise globally the weight of money will need to go somewhere. It is recognised that while as an asset class the European student market may be 10 or more years behind the UK, inevitably overseas student accommodation is going to become very attractive to both investors and developers a like as jurisdictions come to terms with the fact that less regulatory control will encourage market rents at a level to justify development and investment.
Roundtable headline highlights – Casper Bos, Associate
- Increase in numbers of international students
More students are looking to study overseas and more are spending longer at university as they finish one degree and take on another.
- Building and management solutions tailored to the specific locality are called for
Occupier preferences drive design. There is a common wish for security, a sense of community and access to technology but there are also also location specific cultural preferences. New hotel management style agreements are being used and international operators are teaming up with local operators or developers.
- Regulation is a serious challenge in every jurisdiction
Student accommodation is often classed generically as residential. This results in burdensome regulatory requirements which increase cost and present feasibility issues. There is a need for on-going dialogue with regulatory authorities to help them see student accommodation as a separate category in its own right, with appropriately modified regulation.
Conclusion: There are exciting opportunities but the devil is in the detail and local knowledge is essential
To make the most of opportunities in the non UK European markets will require not only the participation of developers and investors, but also that of other stakeholders in the field. Local government entities in particular have a key role to play as facilitators to enable and accelerate the provision of student accommodation in their area. A detailed understanding of local regulatory issues as well as of the expectations of those ultimately occupying the accommodation will be key to successful projects going forwards.
We will continue to monitor progress in the Sector so watch for more of our blog posts. If you would like to speak to your local expert on Student Accommodation please feel free to contact them.