Student accommodation could offer a good degree of income in France
The epic summer holidays will soon be drawing to a close and many students will be embarking on the next stage of their academic adventure. Meanwhile, for those looking for a good investment opportunity in France, student accommodation could provide a good degree of income in straitened times.
According to a new report from Savills, called Spotlight: Student Housing in France, “in the wake of the credit crunch the student market is rapidly expanding. The number of postgraduate applications surged during the 2009-2010 academic year with 82,000 more students than the previous year. This represents an increase of 3.7%, the highest growth since 1993 (+6.4%).
While this rise slowed last year, with an rise in applications of just 0.2%, according to the report, the long-term prospects for those buying property as student-lets is promising. Savills points out that 2.32 million students went into higher education in France last year, 284,659 of which were international students. “France remains a sought-after country for postgraduates,” says Savills, “notably attracting an increasing number of Chinese students. The number of international students expanded more rapidly than the total number of students (+5.4% last year) thus the share of international students is currently 12%. This ranks France as the third most attractive student destination after the US (31%) and the UK (17%). “
The increase in the number of Asian students is anticipated to have a significant effect in the coming years, with Savills saying that this will make a major contribution to a worldwide increase in the student population of some 200 million by 2015. In France itself the “foreign student population is expcted to increase from 285,000 students today to 750,000 in 2020, which would then represent 30% of all students.”
This will add further to a demand that is already outstripping supply. Student housing provision is currently made up of an estimated 342,500, while 1.3 million students wish to live independently. The average rent for public and private student housing, says the report, is €388 and €568 per month respectively. Savills goes on to summarise that: “Increasing demand, high occupancy rates, strong rental growth and high expected yields explain the growing interest from investors for this niche market.”
This report comes hot on the heels of Knight Frank’s International Student Property 2012 (as reported in last month’s issue), which identifies Paris as the top investment destination as it boasts “nearly a quarter of a million students at 16 world-renowned universities… with nearly one in five of these students coming from outside France, underlining Paris’s global reach… Private accommodation in Paris is generally expensive, meaning private student accommodation can be an attractive option.”