25 July, Il Sole 24 Ore
The considerable gap between Italy and the rest of Europe concerning student housing makes the country appealing in the eyes of institutional investors, which see Italy as the new investing frontier. “There are strong opportunities in Italy’s major student towns – explains Luca Villani, Jll Italia head of professional services. – Milan and Rome above all, where the big investors have already completed other real estate investments”.
What are the most interesting cities for investors?
Certainly Bologna, Florence and Turin, but there is interest also for the south of the country, especially Naples. We believe that investments will concentrate in northern and central Italy, but also in the south.
Which investors are interested in student housing?
Besides the traditional players, already present in Italy in other market segments, we’ve registered the interest also from new and specialised companies, generally with a solid experience in mature markets such as the UK. I’m thinking about investors with an actual international student housing investment platform, who are evaluating investing in Italy. Such investors will determine how the market will develop, as we’re increasingly going towards management contracts and fewer lease contracts, which have characterised the domestic market so far.
In your opinion, will there be any significant changes for the final user, the students, concerning costs? Will student halls become more affordable?
We don’t think that the new facilities will be cheaper, but the most dated or most basic facilities might be repositioned on the market. The model investors are looking at goes way beyond a place where to sleep and eat: residences are actual experiences in the student life. For this reason, it’s unlikely that prices will decrease, considering the high quality of the services on offer.
Are there any Italian investors in student housing?
There are already some Italian investors, while some others are interested in entering the market. Student housing is seen as an actual asset class among alternative investments. It’s very interesting also for developers since the offer is lacking products.
What are the returns?
As this is a new asset class, we can’t say with certainty what the returns will be based on the figures of the market, as in the office segment. We may indeed say that student housing can provide better margins that offices, retail and logistics. We believe margins range between 5.5% and 6.5%.
How much do student housing investments amount in Italy?
About 1% of the total investments, corresponding to approximately 7 million euro in 2017, against the 5.4 billion in the UK and the 422 million in Spain.
In your opinion, what is the key element for the development of student housing in Italy?
Definitely the product availability. I mean the possibility to identify the areas and the properties with the right characteristics and potential to be converted into student residences. This matter is strictly connected with the intended use of properties, whose regulation is very fragmented and varies considerably throughout the different parts of Italy. This is a crucial matter for a big investor or a developer.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi