So far 2018 has been a successful year for the CEE student housing market. With the overall market maturing across Europe, CEE has been spotted as an emerging opportunity for investors, developers and managers. CEE, that is still developing, has attracted student housing players as a less saturated market with a lack of supply, growing student numbers and, thus, prospects for higher returns.

 

Both investors and developers recognise the benefits of the asset class in the region and more and more of them enter the market. For instance, International Campus AG have entered into the joint venture with the Czech project developer Karlin Group for THE FIZZ Prague and IC Campus plans further acquisitions in Central Eastern Europe. Developers are driven by the first-mover advantage in the market to take both control and risk of where and what to build.

 

 

CEE student housing has experienced an uptake from international investors. The stakeholders, backed up by capital from Europe, the U.S., South Africa and Southeast Asia, find the region more and more interesting. Well established investors in Western Europe now consider CEE as their next target as well as local investors that see the prospects of further investments into the region.

 

 

 

As we are at the end of the cycle, investors allocate more capital to more crisis-resilient asset classes, including student housing. The student sector has proven to be resistant to economic downturns. Back in 2008 and 2009, student numbers did not decrease during the recession, but either continued stable development or somewhere actually increased, as many considered studying to be a viable alternative during the economic recession.

 

 

The prospects are positive for the region in the coming period with the appealing economic situation and overall attractiveness of the asset class. Student housing as an established sector with enough capital and liquidity, in general, attracts institutional investors with high yields and prospects of portfolio diversification. The growing student numbers over the last decade adds to the attractiveness of the sector. For these reasons, more and more investors are expected to join student housing in the CEE region.

 

 

Investors and developers utilise the benefits of the growing total and international student population and undersupply of student beds mainly in Polish, Austrian and Czech cities. Prague, Vienna, Warsaw and Krakow are currently on the radar of investors and developers and there is still space for new players to enter. Budapest also showed a viable opportunity and lack of private PBSA supply.

 

 

Product is key and one needs to get it right to secure the ongoingly high occupancy rates. Investigating and following student preferences to determine the student housing product is increasingly more important these days. This is more applicable to the structure and content of the common areas than the particular room. In some cities, communal premises are 6 times more important to student decision than the furnishing of the room.