Interest in student residences in several Portuguese cities

Dynamic. This is how we can define the student residences market in Portugal. There is a lot of demand and still little supply, a scenario that may change in the near future, with projects in the pipeline.

Lisbon and Porto lead the investors' preferences, but there are new destinations in the pipeline, such as:

• Coimbra
• Braga
• Aveiro
• Évora
• Covilhã

These are some of the conclusions to be drawn from the most recent study by consultancy Savills, which considers that this is a segment that still has a lot of room for growth.

According to the study Portugal Student Housing, in the academic year 2020/2021, there was a total of 412,000 students enrolled in higher education institutions in Portugal, of which 14% were students from other countries. 

"There is a growing demand for student residences. However, the supply is often dated and totally inadequate to students' needs. Even with the rapid expansion of new projects in Lisbon and Porto, a significant part of the market is covered by informal supply provided by the traditional rental market," says the consultancy, adding that supply in Lisbon stands at 4% and in Porto at 7.5%. "The two cities have a combined total of 126 student residences, which represents about 10,000 beds, from private and public operators," points out the study. 

Savills

Supply will soar until 2024

According to the consultancy firm's estimates, by 2024, the supply of student residences in Lisbon and Porto will be boosted by another 8,000 beds, following the development of four new private projects. 

As for room prices, they vary between 400 and 1,110 euros per month in accommodation in the capital and between 380 and 1,000 euros in the city Invicta. Also noteworthy is the fact that sustainability, increasingly on the agenda, is "reconfiguring the parameters of demand for student residences", notes Savills. 

Proof that this is a growing segment in Portugal is the fact that, for example, investors continue to pay close attention to this market, with "an increase in pipeline projects, which shows the dynamism of this sector, which is beginning to expand to other academic cities, such as Coimbra, Braga, Aveiro, Évora and Covilhã. "The entry into the market of more operators and the multiplication of projects will make this segment grow in Portugal," predicts the consultancy. 

Promising future for student residences in Portugal

Saviils considers that, despite still living in a "pandemic climate, it is possible to predict that the volume of investment in the student residences market in Portugal will continue to grow, considering the more than 200 million euros that are currently in the pipeline, from transactions that may close during this year". 

For Alexandra Portugal Gomes, Head of Research at Savills Portugal, there is no doubt: "The student residence market in Portugal is still emerging when compared to the main European capitals.

Despite the metropolitan areas of Lisbon and Porto already showing some maturity, the potential for expansion is still inherent with the gradual increase in students over the years. Besides the increase in the number of students, another factor that has dictated a change of paradigm in the student accommodation market is the increase in the quality of supply". 

Horacio Blum, Operational Capital Markets Associate Director of Savills Portugal, also believes that Portugal continues to be in the sights of investors in this market segment. "We see a great interest from European investors to enter the Portuguese market, due to the robust 'fundamentals' of demand and relatively low coverage rates, compared to other European cities," he comments.