There will be a shortage of around 46,000 beds in student residences in Lisbon and Porto. This is the conclusion of the new edition of JLL's "Student Housing Portugal" study.
It's true that the Portuguese stock has been expanding and qualifying in recent years, but the number of university students has been growing at a much higher rate, and so the imbalance between supply and demand remains. In addition, the context is one of strong performance in the Purpose-Built Student Accommodation (PBSA) segment, which is attracting more and more investment and leading operators.
Joana Fonseca, Head of Strategic Consultancy & Research at JLL, explains in a statement that "the university residence sector in Portugal has changed a lot in recent years. We've gone from an informal market, with an offer dominated by religious institutions and the social action services of public universities, to a stock managed by professional operators." He reiterates that "the sector's progress in terms of quantity and quality has been remarkable, but the existing stock and planned new projects are still not enough to meet the demand for this type of accommodation".
Currently, according to Joana Fonseca, "we are contrasting almost 450,000 students in higher education with a stock of less than 10,000 beds in private university residences. This stock will grow to almost 17,000 beds by 2026, but even accounting for this increase, the number of beds available is no more than 20% to 30% of the number of displaced students in Lisbon and Porto, which means that we would need around 46,000 more beds to meet the needs of demand."
30,000 beds shortage in Lisbon and 16,000 in Porto
This report counts 9,200 beds integrated into private university residences in Portugal, a figure which, according to the consultancy, has evolved considerably over the last three years, both in number and quality, thanks to various projects operated by leading brands in the university accommodation segment. This stock should reach 17,000 beds by 2026, taking into account the 7,800 beds accounted for in the projects that are in the pipeline.
In Lisbon, the number of private beds in operation covers only 17 per cent of the displaced student community, and will increase to 18 per cent considering this pipeline.
In Porto, on the other hand, the market coverage rate is higher, with the current stock catering for 27 per cent of displaced students, and should improve to 32 per cent when the new projects are completed by 2026.
JLL therefore concludes that there will be a shortage of 30,000 beds in Lisbon and 16,000 in Porto.
Attractive performance and growth potential attract investors
André Vaz, Head of Living & Alternative Investment, Capital Markets, at JLL, points out that, "in general, there is growing interest from investors and developers in the alternative residential segments, but this one in particular has been the focus of special attention. In addition to the imbalance between supply and demand, and therefore the enormous growth potential it presents, this is a sector with very attractive performance indicators, including occupancy and re-accommodation rates, monthly fees and occupancy times."
On the other hand, "the qualification and sophistication of the offer in recent years, with the entry of various professional operators, are also factors of attraction. New investments, both in terms of promotion and income, will continue to grow."
The occupancy rate for the active supply of private beds is expected to be around 100 per cent and the rebooking rate 80 per cent. Among foreigners, Brazilians are the ones who make the most use of this type of accommodation, while in terms of stays, there is an average occupancy of 7 months per academic year.
As for prices, they have been rising in parallel with the qualification of the stock. Lisbon has an average monthly fee for this type of accommodation of around 770 euros, up from 570 in Porto. But prices vary between 330 and 1,440 in Lisbon and between 330 and 842 in Porto.
Joana Fonseca concludes by emphasising "the capacity for expansion of the national university residence market. We have a market with 100% occupancy and between 20% and 30% satisfaction of demand, with rising prices and average occupancy times of 7 months, in a consolidated university destination in Europe whose offer has become more sophisticated. We need to make up for this shortfall of 46,000 beds, creating the conditions for the country to project itself even further among the top university destinations in Europe."
