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Student housing is a relatively new asset class in Poland, with a high growth potential. Demand for private student accommodation is on the rise, mainly based on a large student population and a rising number of international students. There were 1.35 million students in Poland in the academic year 2016/2017, while the number of international students increased by 15% year on year to 65,700. The first student housing schemes are operating on the market. Although only a few new investments in purpose-built student accommodation were observed in 2017, the pipeline of planned projects by major players is ample.
Demand for student housing is fundamentally based on demographics within the student population. To begin with, Poland has one of the largest student populations in Europe, embracing 1.35 million students. Poland is also benefiting from a global growth trend in the number of international students. Today, there are over 4.5 million students in the world studying abroad. By 2020 this number is expected to double. In the academic year of 2016/2017, there were 65,700 international students enrolled at Polish universities. The growth dynamics in international students are enormous. Within the last five years, the number of foreign students has more than doubled, while noting average annual growth rates of around 20% each year. It is expected that the number of international students will increase further. Foreign students are already the main tenant group in the first operating purpose-built student accommodation (PBSA) schemes today. The predicted growth dynamics will foster demand for student housing. On the other hand, new student accommodation will help to make Polish universities more attractive to international students and domestic students alike.
When it comes to supply, there is only a limited offer targeted directly at students. Generally speaking, there are three main options for students. The first option is student halls owned by public universities, which cater for less than 10% of all students enrolled in Polish universities. These halls are in most cases old and uninvested and represent low quality and standards, but for a low price to be fair. A major portion of the rooms in these public student halls are used for multiple occupation, while bathrooms and kitchens are typically shared. The second and widest option is represented by the residential market. A few students are lucky to possess an apartment of their own, to buy an apartment or to be able to use a private apartment owned by their family. Yet, the vast majority of students rent dwellings in the private rented sector, whereas they target mainly studio units or larger shared apartments. However, the private rental market in Poland seems not to favor students as a tenant group. Many landlords do not want students as renters. In addition, the residential rental market is relatively expensive, non-institutionalized, and is not transparent, particularly for foreign students. The third option is to stay in the family home, which an estimated 20-30% of students do. Thus, they do not necessarily need to move elsewhere, though some might want to start a life on their own but either cannot afford it or cannot find a worthwhile offer.
The market of PBSA schemes is still at a very early stage in Poland. Yet, given student demographics and an almost complete lack of tailor-made supply, this market segment is predicted to have a great potential for growth. The first PBSA schemes have started operations in major regional cities.
Several PBSA projects have recently been announced by new players. In a forward deal which focused on residential assets, Bouwfonds IM acquired one student house with around 140 units in Kraków, which is currently under construction. Golub GetHouse announced the purchase of a plot in Krakow designated for a student housing scheme of around 600 units. Another project with approximately 400 beds is planned by Golub GetHouse in Warsaw. These will be the first student housing investments of the new fund Golub GetHouse Property Fund II FIZ, which plans to realize a portfolio of private student halls and apartments for rent. Besides these officially announced investment plans, there are plenty of other investors not only screening but also investing in the market. Due to the lack of existing stock and fine performance of the already operating schemes, we expect the Polish PBSA sector to grow significantly in the next few years.
You can find more details on the prosperous residential asset classes and investment opportunities on the housing market in Poland in our report: Residential Poland. Market overview 2018.