Key government initiatives ‘to drive Dubai student housing market’

Key government initiatives ‘to drive Dubai student housing market’

Student housing, a relatively untapped market within the UAE in general and Dubai specifically, is expected to grow over the coming years, supported by several key demand drivers, including a number of government initiatives, according to real estate expert CBRE

It is a form of housing which typically combines private living areas (single or shared
rooms) with common facilities and amenities. The students rent rooms within these developments to reside in while they complete their university degrees.

There are three types of student housing – On-Campus Accommodation; University Affiliated Off-Campus Accommodation and Purpose Built Student Accommodation (PBSA) Developments.

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*On-Campus Accommodation: Housing that is located within or close to university premises and is managed, operated and owned by the university.
*University Affiliated Off-Campus Accommodation: Located close to university campuses within affordable residential communities, these are full residential buildings or single residential units that are leased by the university and then subleased to students. The buildings and/or units are managed
and operated by the landlord/owner of the building.
*Purpose Built Student Accommodation (PBSA) Developments: Designed and built specifically for university students, these developments are operated by student housing management companies. Universities have no affiliation to these developments

During 2018-19 academic year, the total number of students enrolled within higher education reached 53,200. By the end of 2019, existing supply for student housing in Dubai surged to 5,200 beds across approximately 20 projects mostly located in DIAC, Dubai Land and Dubai Media City.

According to CBRE, most of the future supply of student accommodation is expected to be located within DIAC, adding 3,000 rooms to the market by the end of 2020. These developments are planned to be developed by a mix of international and local companies.

Dubai’s student housing market is set to benefit and provide new investment opportunities over the coming years, thanks to the major government initiatives to boost the education sector and position Dubai among the top education providers in the region, coupled with the increasing presence of international education providers, it stated.

There are several demand drivers which may potentially impact the demand for student housing within Dubai over the medium to long term such as government vision; population; government initaitives and higher education expansion and programme variety.

Currently, most student housing in Dubai comprises off-campus residential buildings located in
nearby affordable residential communities, such as Dubai Silicon Oasis, International City and Dubai Land, stated CBRE in its report.

In addition, there are a number of non-affiliated off-campus student housing which are typically
apartments, constituting the largest student housing product offering across Dubai.

According to the top real estate expert, there is a limited supply of PBSA, with only three developments situated across Dubai, including Uninest which was acquired by Emirates NBD REIT in 2017, showcasing the potential attractiveness of this asset class among investors.

However, PBSA developments are expected to increase in the future as demand for affordable student housing increases. Two such examples of new developments are The Myriad and KSK Homes Phase 2 in Dubai International Academic City (DIAC).

Moving forward, CBRE is anticipating that the student share split by region will shift in line with the wider macroeconomics trends.

Moreover, PBSA developments are expected to remain an attractive investment, particularly if rental income is secured with an established operator. Furthermore, most of these buildings comply with the fundamentals of Sharia Law and are expected to benefit from potential growth in line with demographic trends, it added.-TradeArabia News Service