Investing in Portugal student housing can be an attractive opportunity for various reasons, including the steady demand driven by the continuous influx of students, the potential for higher rental yields, and the prospect of long-term tenancy, among other factors.
Factors such as lower vacancy rates, professional management services, government support, and resilience in economic downturns further contribute to the appeal of this specific real estate niche.
Student Housing market in Portugal
Lisbon stands out as one of the most undersupplied Purpose-Built Student Accommodation (PBSA) cities in Europe, with a provision rate standing below 3.5%. In contrast, Porto represents a more consolidated market; however, its provision rate remains relatively low at 6.97%.
These figures are notably modest when compared to more mature markets like London or Amsterdam, where the provision rate hovers close to 30%.
The allure of Portugal for higher education is evident, attracting a growing number of students, especially internationals. The appeal lies in Portugal’s country lifestyle, favorable weather, and prestigious universities. Despite this, the limited PBSA supply in the country positions it as an attractive market for the development and operation of student accommodation assets.
As of now, Portugal boasts 9,500 PBSA operating beds. Over the past five years, the Portuguese housing market has witnessed a substantial total investment amounting to €637 million, reflecting the ongoing interest and investment activity in the real estate sector, particularly in student accommodation.
Why do University Students choose to study in Portugal?
University students choose to study in Portugal for a variety of reasons:
Quality of Universities: Portugal is home to universities that offer high-quality education and are recognized for academic excellence.
Great Climate: The favorable climate in Portugal, characterized by mild winters and warm summers, is a major attraction for students seeking a pleasant living environment.
Safety & Security: Portugal is known for being a safe and secure country, providing a reassuring environment for students pursuing their studies.
Low Cost of Living: Compared to many other European countries, Portugal has a relatively low cost of living, making it financially accessible for students.
Practice-Oriented Teaching System: Many universities in Portugal adopt a practice-oriented teaching system, providing students with hands-on experience and practical skills.
Number of Courses in English: The availability of a wide range of courses taught in English makes Portugal an appealing destination for international students.
Nightlife: Portugal offers vibrant nightlife, providing students with social and recreational opportunities beyond their academic pursuits.
International Students Nationalities
Brazil holds the majority, constituting 26.3% of the international student population. Following closely, Cape Verde represents 9.0%, São Tomé and Principe contribute 8.4%, Angola comprises 7.6%, and France rounds out the top five with 5.9%.
Why invest in Student Housing?
Sustained Demand
Dive into the robust stability of student housing investments, where the unwavering demand for quality accommodation persists. This enduring trend is fueled by a continuous influx of students actively seeking a living environment conducive to their educational pursuits.
Enhanced Rental Yields
Embark on a journey to financial advantage with student housing investments that consistently deliver superior rental yields. Experience the lucrative rewards of this market, where the potential for higher returns adds a significant dimension to your investment portfolio.
Secure Long-Term Tenancy
Fortify the longevity of your investment by securing extended tenancy periods within the student housing market. Ensure a stable income stream and minimize uncertainties as tenants commit to longer stays, providing a solid foundation for the sustained success of your investment.
Reduced Vacancy Rates
Elevate your returns by investing in student housing, a sector known for lower vacancy rates compared to other real estate segments. Maximize the profitability of your investment as the well-managed properties attract and retain tenants, minimizing unoccupied periods.
Professional Management
Delegate the intricate tasks of investment management to Novyy’s proficient team, ensuring not only operational efficiency but also peace of mind. Our dedicated professionals are committed to optimizing property performance, tenant satisfaction, and overall success of your student housing investment.
Government Endorsement
Navigate the complex investment landscape with unwavering confidence, knowing that your investment in student housing is backed by government support. Enjoy the assurance of a stable and supportive environment that further enhances the appeal of the student housing sector.
Resilience in Economic Downturns
Highlight the remarkable resilience of student housing investments, particularly during economic downturns. Showcase how this sector stands strong in the face of economic challenges, making it a dependable choice for astute investors seeking stability and resilience in their portfolios.
Where to Invest in Student Housing in Portugal?
Several Portuguese cities stand out as hubs for student housing, with diverse options catering to the growing demand. Key locations include Porto, Aveiro, Covilhã, Braga, Coimbra, and Lisbon. However, it’s noteworthy that the majority of the student housing supply is concentrated in Lisbon (Lisboa) and Porto.
In these vibrant urban centers, approximately 85% of the total supply is concentrated, making them the primary focus for investors and individuals seeking opportunities in the student accommodation sector. The dynamic atmosphere, renowned universities, and cultural richness of Lisbon and Porto contribute to their appeal among students and, consequently, to the concentration of student housing options.
Investors and stakeholders interested in the student housing market in Portugal would likely find Lisbon and Porto to be the focal points for opportunities due to the significant concentration of supply in these two cities.
Portugal Student Housing Amenities
Private Bathrooms and Kitchenettes: Providing students with personal and convenient facilities for both personal care and culinary needs.
Common Lounge Areas: Shared spaces designed for socializing, relaxation, and community-building among residents.
Common Study Areas: Dedicated spaces for students to focus on their academic endeavors, fostering a conducive study environment.
Laundry Services: On-site laundry facilities to meet the practical needs of students for convenient clothing care.
Parking Areas: Accessibility to parking spaces, offering convenience for students who own or use vehicles.
Gyms: On-site fitness facilities or gyms, promoting health and well-being among student residents.
Outside Spaces and Terraces: Outdoor areas and terraces providing additional spaces for recreation, relaxation, and socializing.
Common Kitchen Spaces: Shared kitchens equipped with facilities for group cooking and communal dining.
Security: Ensuring the safety and security of residents through features such as secure access points and surveillance systems.
Return on the investment
Investing in student housing Portugal presents a compelling opportunity with promising investment returns. Here’s an analysis based on Lisbon and Porto data:
Room Prices
Generally speaking, a single bed is priced between €400€ – 1€,100 per month in Lisbon and between €380 – €1,000 in Porto.
Occupancy Rate
A high occupancy rate of around 95% per year indicates a consistent demand for student housing in both Porto and Lisbon.
Stabilized NOI (Net Operating Income) Margins
The net operating income (NOI) is a key indicator of the profitability of an investment. With stabilized NOI margins ranging between 70% and 80% per academic year, it suggests a robust financial performance.
Key priorities for students when choosing an accommodation?
Excellent Location: A convenient and well-connected location that meets their daily needs and facilitates easy access to amenities.
Proximity to University Campus: Living in close proximity to the university campus for ease of commuting and reduced travel time.
Proximity to Public Transports: Accessibility to public transportation, ensuring convenient travel within the city.
Common Areas for Social Interaction: Shared spaces or common areas that foster social interaction, providing opportunities to connect with fellow students.
All-Inclusive Billing System: Accommodation with an all-inclusive billing system, simplifying financial arrangements and avoiding hidden costs.
Double Beds: Comfortable and spacious accommodations featuring double beds for a better living experience.
Modern Design: A modern and well-designed living space that aligns with contemporary aesthetics and functionality.
Private Bathrooms: Accommodations with private bathrooms, offering privacy and convenience for the students.
Portugal Student Housing Main Players
Livensa Living
Livensa Living is likely a student housing provider in Portugal. They may specialize in offering purpose-built accommodations designed to meet the needs of students, providing a modern and comfortable living experience. Livensa Living has five student residences located around Portugal’s main cities and university areas.
Xior Student Housing
Xior is a European student housing investor and operator. They focus on acquiring, developing, and managing student housing properties in various European cities, including potentially in Portugal.
Liv Student
Liv Student is a brand that provides student accommodation solutions. They may emphasize creating contemporary living spaces for students with amenities and services tailored to support academic and social needs.
Nido Living
Nido is a well-known global student accommodation brand. They often specialize in creating vibrant and community-focused living environments for students in major cities worldwide.
Portugal Top Universities
1. Nova School of Business and Economics (ranked 23rd on the Financial Times Masters in Management 2021 ranking)
2. Católica Lisbon School of Business and Economics (ranked 45th on the Financial Times Masters in Management 2021 ranking)
3. Universidade de Lisboa (ranked 365th in the QS World University Rankings and 30th in Europe in the CWTS Leiden ranking for scientific performance)
Why invest with us?
Local Expertise
We know Portugal. Due to our extensive local knowledge, we believe that concentrating our services in a single country destination is the best way to give you the most thorough and useful information.
Holistic Approach
We offer a streamlined communication channel for the entire process, delivering a comprehensive service that encompasses all facets of your real estate investment journey, including property search, negotiation, legal matters, due diligence, and property management.
Independent Service
As an independent buying agent, we have the flexibility to collaborate with any agent, seller, promoter, or developer, providing you access to all available options in the real estate market. This enables us to objectively analyze every opportunity and find the right property for you at the best price, free from complications.
Simple Process
Technology plays a significant role in our company, allowing us to provide you detailed property market information and minimize our clients’ involvement in paperwork. As customers ourselves, we understand how to best serve your needs.
Frequently asked questions about Portugal Student Housing
What are the typical rental costs for student housing in Portugal?
Rental costs vary, but on average, students can expect to pay from €850 to €1200 per month.
What are the common lease durations for student housing in Portugal?
Standard lease durations are typically aligned with the academic year, spanning from September to June.
What makes Portugal an attractive destination for student housing investment?
Portugal’s appeal lies in its growing student population, favorable climate, renowned universities, and the potential for a profitable student housing market.
What is the typical return on investment (ROI) for student housing in Portugal?
ROI can vary, but investors often find attractive returns due to the consistent demand for student accommodation and the undersupply in certain regions.
What are the best cities in Portugal for student housing investment?
Cities with prominent universities, such as Lisbon and Porto, are particularly attractive for student housing investment.
What factors contribute to the success of student housing investments in Portugal?
Factors include strategic location, amenities offered, proximity to universities, and understanding the preferences of the student demographic.
Are there financing options for investing in student housing in Portugal?
Yes, various financing options are available, and investors can explore partnerships with local financial institutions.
What are the prespectives for the student housing market in Portugal in the coming years?
With a continued influx of international students and an undersupply of purpose-built accommodation, the student housing market in Portugal is expected to offer promising growth opportunities.
