Investments in student accommodation are set to increase in Greece in coming years in areas where supply falls short of demand, such as the cities of Patras and Heraklion (Crete), according to Tassos Kotzanastassis, chair of Urban Land Institute, (Greece and Cyprus) and managing director of 8G Capital Partners.
With rents in large city centers in Greece that accommodate universities having shot up by as much as 30 percent in the last year, students are having a tough time in finding a place to stay at despite an expected rise in supply levels. In an attempt to solve the problem, Greece is looking into developing a new law that will allow for the construction of new student accommodation centers in a partnership between the state and private investors.
In comments to BusinessDaily, Kotzanastassis points out that one of the most popular strategies investors adopt internationally is one that focuses on "beds". This could take the form of accommodation being offered in each stage of life: student accommodation, flexible living, co-living spaces and small apartments, explains Kotzanastassis.
In Greece, "there will be an increase in activity in student housing in university cities, such as Thessaloniki, Patras, and Heraklion," he says, adding that its exact form will depend on Greece's economic recovery in the short term and the demographics in the long term.
In other countries in southern Europe, interest in student accommodation has been rising sharply. In Spain, investments of 141 million euros were concluded in this asset class in 2018, while in Portugal 10,000 beds are being built for students. In Italy, new investments are also in the pipeline, in cities such as Milan, as funds flock to the country drawn by the prospects in student housing.
In Greece, investments in the field have started but at a slow pace despite the enormous needs.
Prodea Investments, formerly NBG Pangaea, has led the way. The company will operate two student accommodation centers in Patras and Thessaloniki and is eyeing further investments in the field.
Galloping rents in Greece's housing market may slow soon amidst an expected rise in supply levels.
A large number of homes being offered on Airbnb-type platforms is pushing prices downward, making short term rentals less profitable for many owners. Market officials have indicated that tougher tax and regulatory regulations being introduced by the Greek government is likely to push up to 30,000 homes back onto the long term rental market.
"Excessive supply is harming profitability, so we will a shift toward long term rentals," adds Kotzanastassis.
Signs of the market being saturated have appeared in all hospitality assets, even in hotels that have drawn billions of euros in investments in recent years.
"We must not forget that the sector generally has low-quality stock, the result of the crisis and distorted incentives that dictated growth in the past," he says