In the 2022/2023 academic year, there were a total of 446,000 students enrolled in higher education institutions in Portugal, of which 78,000 are international students. This figure reflects a 3% increase in the number of students compared to the previous year. This is one of the conclusions of Savills' latest study on student residences, "Riding the Wave - Student Housing Accommodation".
Facing consolidated growth (15% in the last five years), the growing demand for student accommodation continues to increase and constitutes one of the main challenges facing higher education today. Even with the rapid expansion of new projects in Lisbon and Porto, a significant part of the market is still covered by a supply that is inadequate to the real needs of students.
58% of the supply in Lisbon and Porto comes from private operators
Lisbon and Oporto currently have approximately 12,500 beds, 58% of which are offered by private operators. By 2028, it is estimated that around 8,800 new beds will be made available, of which 85% by private operators in various regions of the country. This offer will especially benefit students seeking access to higher education in major cities such as Lisbon and Porto. In addition, other locations such as Aveiro, Covilhã, Faro, Braga and Coimbra will also be contemplated with new private student residence projects.
Alexandra Portugal Gomes, Head of Research at Savills, says that "the figures support a growing market in Portugal. The need for an influx of supply adjusted not only to student numbers, but also to student requirements, is vital if our market is to remain competitive. We have higher education of a quality that is increasingly recognized in international rankings, but it is necessary that investment from both private operators and public institutions is able to respond in a timely manner to the demand that tends to grow more and more".
The current rate of provision of student accommodation in the capital is only 5%. With around 131,000 students, the city of Lisbon has seen a 3% increase in the number of students compared to last year, 17% of whom come from other countries, mainly Brazil and Angola. For the next few years, the pipeline already under construction will exceed 3,000 beds.
As for the Porto market, the rate of provision of student accommodation is 8.2%. In the 2022/2023 academic year, Porto welcomed 71,750 students, 16.5% of whom were international, with Brazil and France standing out. By 2026, more than 2,000 new beds are expected in projects developed by private operators.
James Snaith, Operational Capital Markets Director at Savills, points out that "during 2023, there have been a number of high quality transactions in the Portuguese student housing market, which demonstrates investor interest, given that entry pricing is softer than in other countries, but the fundamentals are equally convincing".
Luís Clara, Capital Markets Associate at Savills Portugal, maintains that although Porto's university residence market is thriving, with a stabilized operational performance and a dynamic transactional market, the reality is that the provision rate remains relatively low, particularly when compared to more established academic cities across Europe. Recent investment activity has proven that there is still plenty of capital to invest in Portugal, the difficulty remains accessing available land and projects with expected risk-adjusted returns.
