Student housing in the UAE finds its place among other niche real estate investment areas that are gaining traction, such as flexible spaces and senior housing, according to CBRE. While the market is still in its early days, government initiatives are expected to drive future demand in this segment.
Further, CBRE anticipates the traditional student accommodation layout to be reconfigured due to social distancing, with larger rooms, including single occupancy and co-living options, and common areas. Virtual tours, and contactless services, requests and access to premises, may also make their way to this segment.
Globally, student housing has grown by 87% in the last five years up to 2020, and has emerged as a lucrative alternative real estate investment class. Countries such as the US and the UK have seen great success with this asset class, with purpose-built student accommodation (PBSA) addressing the accommodation needs of 34% of the UK's student population.
For the UAE, where the market is still early, student housing is a niche but promising opportunity for alternative real estate investment.
STUDENT HOUSING: AN EMERGING REAL ESTATE INVESTMENT TREND
A previous report by CBRE expected approximately 8200 student beds to be available by the end of 2020. Most student housing in Dubai consists of off-campus residential buildings in Dubai Silicon Oasis, International City and Dubai Land. Some non-affiliated off-campus student housing is also available, but the supply of PBSA developments is limited.
At the same time, PBSA developments are expected to grow with demand for affordable student housing. This demand is expected to be boosted by government initiatives, such as extended student visas, federal funding (UAE allocated 17% of its budget, or AED 10.2 billion to education in 2019), a growing population, and an expansion of higher education institutions.
Several large projects catering to the demand for student housing have been recently launched or are in the pipeline, highlighting the real estate investment potential of this market.
The Myriad Dubai, for instance, is an urban student living community located at Dubai International Academic City. It opened in September 2020, and is currently home to students of over 45 nationalities, including UAE citizens from 30 different Dubai and Sharjah-based institutes.
Elsewhere, Arada recently awarded an AED 367 million contract for Nest, an integrated student housing complex in Sharjah’s Aljada community by Arada. Located at a distance of 10 minutes’ walk from University City, Nest is a smart living concept consisting of 12 five-storey apartment blocks.
Photo credit: https://www.themyriad.com/destinations-dubai/
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