Portugal Student Housing | 2019

2019 Report

Portugal g n i s u o H t Studen

Portugal Student Housing 2019 Report 3

Contents Welcome Note

5

International students, the new reality

6

Student flows in Europe and Worldwide

8

Student accommodation, the latest trends

10

Portugal, the place to be

12

Lisbon

18

Porto

22

Coimbra

26

Conclusion

28

4 Portugal Student Housing 2019 Report

The housing market for students has been evolving at a rapid pace, which means that cities face the need to adapt to the increasing demand and preferences of International Students.

In Portugal several steps have been put in motion to address those needs, not only to increase the amount of supply available for mobility students but also to improve the quality of that supply. From Government entities to Universities, it's clear that there is a strategy to engage more and more students from all over the world, who look to this country as the preferred destination to complete their studies.

This development not only represent a tremendous growth potential, but also confirms that Portugal is one of the strongest players in the Student Housing Market, attracting international investment from relevant stakeholders, who see the opportunity to develop and diversify their business.

Cyril Jessua CEO , Uniplaces

Portugal Student Housing 2019 Report 5

Welcome Note In the last couple of years, Portugal seems to have, definitely, welcomed the investment in Student Housing. One of the alternative sectors that has grown most in Europe, standing out as one of the new real estate products where the service is of key importance, since its business is not exhausted by renting a room and its service aspect offers a critical factor of success and value.

It is essential to create more supply! Only in the cities of Lisbon, Porto and Coimbra, there should be between 20,000 and 35,000 beds. There is a need of increasing the supply in number, of course, but also in quality. With a very hot competition, not only between educational institutions, but also between European countries, it is crucial that the student housing range of supply meet the best European standards.

In a market which does not allow un-professionalized actions, our country is now well on track; being an increasingly popular destination for the big European operators that lead the sector, recognizing Portugal’s opportunities and scope to grow, through innovation.

This sector will continue to consolidate in 2019 and many more are expected in the coming years, with more than 10,000 new beds already on the Lisbon and Porto’s pipeline, most of which are being developed by international operators in partnership with Portuguese and foreign private promoters.

And not for nothing, the Higher Education is an important engine of the economy, with the growing attractiveness of our country together with the international university community, being accountable for making Portugal a far more interesting place for exportations. Uncertainty is shading, since the country is becoming more powerful, a trend that will continue in the coming years, supported by the sustained growth of foreign students in Portuguese universities, which last year alone, reached 50,000, an increase of 17% compared with the previous year. This reality refers to a universe of 373,000 students attending higher education in Portugal (2018) and where the potential demand for these new real estate concepts can be massive.

We are confident about the success of this market in Portugal and eager to follow the transformation impact that it will bring to the country!

Pedro Lancastre Managing Director, JLL

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6 Portugal Student Housing 2019 Report

International students, the new reality

More than ever, Higher Education is global. Rapidly changing demographic profiles, emerging economies and globalization are considered the main drivers of this sector.

The increasing need for soft and hard skills in a business environment makes international mobility mandatory for students that aspire to have successful careers. The ease of travelling and obtaining visas, the increase of medium classes all around the world and all incentive programs, like Erasmus, have come to enable millions of students to study abroad.

Millennials are the main driver of Higher Education and their needs raise new challenges. Nowadays, students look for universities with an international reputation, quality and wide education offer, but they also choose the city destination accordingly to job opportunities, accommodation services and amenities as well as city characteristics like safety, welcoming culture, quality of life, living costs and easy visa processes.

The cost of Higher Education is rarely mentioned as a determining factor of demand from international students.

Despite the fact that wealthy students are able to pay a premium price for the best universities with unique services and accommodation conditions will continue to be an important segment, the next great opportunity will be for the universities with low tuition fees and mid-market accommodation, targeting not only to domestic students but also overseas students from the fast growing middle classes in countries such as Nigeria, India or Vietnam.

Market Drivers

Globalization

Students' Requests Universities

International Reputation Quality and Education Offer English Taught Programs Tuition Fees Cities

Welcoming Culture Quality of Life & Safety Job Opportunities Cost of Living Visa Process The number of international students is expected to exceed 7 million by 2020, when Higher Education is set to become a $70 billion industry. Under the current political panorama, two of the most consolidated markets, USA and UK, which account for 30% of all international students, may see a decrease in their applications, representing a good opportunity for continental European markets with reputable universities.

The connection between talent work and entrepreneurship allows greater economic growth, innovation and development.

Therefore cities and universities are starting to work together, offering better conditions and facilities to cater to the growing number of international students and to attract and retain the best talent available.

Cities like Lisbon and Porto, have come up with new strategies to integrate the new reality of students and talent in the urban fabric through innovation and creative labs, start-up hubs and new policies to encourage young professionals to establish roots, to found their own companies and to be employed by companies with its headquarters in the city.

The number of university programs taught in English has been increasing exponentially.

Demographic Changes

Emerging Economies

30% to 40% of international students wish to stay, work and live in the destination after graduation.

Portuguese universities have climbed in the rankings and the international students' applications and enrollments are increasingly higher.

Millennials

Experience

Millennials were born between the

Travel World citizens Entrepreneurship Wellness

mid-1980’s and late-1990’s, having grown up in the internet era. It is a strong generation about to enter in its flourishing years. A huge increase in their spending patterns is thus expected.

Nowadays, they prefer to pay to have access to products, services or experiences rather than buying them.

Renting is the new norm. According to Goldman Sachs, they don’t consider purchasing their first home before the age of 45.

Flexibility

Co-living Renting Sharing economy

Connectivity

Mobile E-commerce Social networks Blogs

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8 Portugal Student Housing 2019 Report

Student flows in Europe and Worldwide Students wishing to go to university are no longer constrained by a lack of choice with the world’s leading universities, all competing to attract the best talent available.

International students want to go abroad to seize the opportunity of meeting different people, develop soft skills, learn new cultures and languages and broadening horizons.

USA and China are undoubtedly the major players in the international students’ market. They are the largest hosting country and source of international students, respectively.

The USA and UK, where English is the primary language, host more than 30% of the world’s international students, dominating the upper end of global university rankings.

The continental European universities are trying to increase their competitiveness through the introduction of English Taught Programmes (ETPs). In 2007/8, there were only 500 ETPs available in the key European markets, which have now increased to 6,000.

30% of all international

21%

50% of international

students come from Asia.

No. Of Students

Netherlands

86,189 no.of students 4%

Germany France

235,123 no. of students 12 %

226,431 no. of students 12 %

UK

428,724 no. of students 22 %

USA - 907,251

Russia

UK - 428,724

10%

228,756 no. of students 12 %

Australia - 294,438

7%

France - 235,123

5%

Russia- 228,756

5%

Top 5 Origin Countries in the World 18%

India - 253,926

6% No. Of Students

Germany, France and the Netherlands are growing but not yet completely consolidated, considering the number of foreign students they receive each year. Due to the increasing demand of international students, markets such as Portugal and some other Southern European countries are bound to grow.

students are hosted by USA and UK.

While China, Hong Kong and Malaysia are the main source of the wealthiest students, emerging economies in Asia and Africa are flooding the higher education market with an increasing number of students from middle classes who may potentially be studying abroad over the next 5 to 10 years and are looking for more affordable destinations.

Top 5 Hosting Countries in the World

Europe is the main destination for international students.

The old continent hosted 42% of these and it has registered a growth of 120% since 2010, reaching 1.9 million students in 2015. The UK is responsible for hosting 22% of all international students in Europe.

3%

Germany - 116,328

2%

Rep. Korea - 108,033

2%

Saudi Arabia - 86,471

Source: UNESCO 2015

Russia

56,328 no. of students 6%

Ukraine

China - 800,701

60,328 no. of students 7%

France

Turkey

80,635 no. of students 9%

45,820 no. of students 5%

Germany Source: UNESCO 2015

116,346 no. of students 13 %

Top 5 Hosting Countries in Europe Top 5 Origin Countries in Europe

10 Portugal Student Housing 2019 Report

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Student accommodation, the latest trends

Student housing is undergoing major changes in terms of design and purpose. It is being redesigned to build a sense of community in Purpose Built Student Accommodation (PBSA), aiming to offer a unique experience. A space intended to bring together living, studying and socializing purposes along with recreational, entrepreneurial and work functions in order to foster entrepreneurship, innovation and networking. Students are becoming extremely demanding thus universities and operators must incorporate new features, modern design and technology in the accommodation supply.

Co-living: communities beyond the university life The co-living market is set to grow, offering an alternative concept of housing and a new lifestyle. It is a forward thinking concept designed mainly for young professionals to live, work and socialize. People who are not tied up to location, but to internet. The main difference comparing to PBSA is the small private apartments, as an alternative to rooms. Co-living schemes also offer common areas, but with a different range of amenities and services, usually positioned for a higher segment.

What are students looking for?

The Development Trends

Strong brands

Flexible and open areas for different uses

High quality and design

Design according to specific fields of study

Recreational areas: cinemas, leisure & meeting rooms, gym & spa, sports facilities, restaurants & retail

Modular construction systems

Services: laundry, cleaning, catering, concierge

Student Housing in Europe The market share of PBSA in the key European markets is considerably low, both for university owned and privately operated beds. Momentum in the market is starting to grow as established operators, international investors and new entrants look for opportunities on the continent, supported by favorable supply and demand imbalances in less mature markets.

While the main markets across Europe are all under-supplied in terms of student housing, the sector in each country is at different maturity stages. This is reflected in the number of available beds,

Sustainability

Currently, the student housing rents present different levels among several European markets. As a rule, the UK weekly rent is equivalent to the remaining European countries monthly rents, regardless of the distinct variations between public and private accommodation, which also depends on location.

the number of operators and private owners, as well as the different demand dynamics and student preferences.

Countries like the UK, Germany, France and the Netherlands, are the most mature markets and have a wide variety of student residences and an extensive pipeline. Southern European markets like Italy, Spain and Portugal, are considered emerging markets and are arousing a growing interest from investors.

Despite Northern Europe is not, the main destination for international students, it has a very mature and quality student housing market.

In contrast, there is a clear shortage of private rental stock in some European capitals. Examples are Lisbon and Dublin, where the local residential rents are beyond many students purchasing power, leading to an increasing demand in student housing, where rents already started to increase, by as much as 25% over the last two years.

Investment across Europe Historically, student housing portfolio deals in Europe have been scarce, as a result of the prevalence of university owned assets, the limited number of private operators, private investors being able to purchase individual beds on a piece by piece basis and a lack of institutional grade stock. However, with the growing trend of studying abroad, student’s accommodation supply became scarce creating momentum for significant speed and scale of investment in this market, which has developed into an established sector.

We are now witnessing investor demand for student housing grow faster than many markets can accommodate. This demand for student housing means that investors are looking increasingly to new markets and cross border portfolios.

â‚Ź33

billion were invested in European student housing market since 2010.

88%

The UK is the main student housing investment market in Europe.

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12 Portugal Student Housing 2019 Report

Portugal, the place to be Portugal is constantly and globally mentioned, full of entrepreneurial stories, irreverence, and ambition. Therefore, more and more companies, investors and people look to Portugal in a different way the Portugal of today is increasingly a country to work, to study, to invest and to live. Portugal is a truly global destination, considered one of the best in the world. The last few years have been exceptional, full of business, awards and recognitions that led us even further.

Why international students choose Portugal 10% 9% 9% 9% 8%

According to Banco de Portugal, the Portuguese GDP increased 2.7%. It has been sustained by an improvement in exports, an enormous dynamism in the tourism and real estate sectors and by significant growth in foreign investment, which was also essential to decrease the unemployment rate to 7%. Tourism is key to the high street retail boost and is one of the main factors responsible for the cities’ regeneration, proving critical for the growth of the national economy. The quality of life and country attributes, such as tolerance, culture, safety, gastronomy and climate, equally contribute to this success.

4

most peaceful country th in the world (Global Peace Index, 2018)

The current context allows Portugal to take advantage of its notoriety as a hot spot, attracting an increasing number of foreign residents and investors. In line with the Golden Visa and Non-Habitual Residents Tax Benefits program, the government’s policies to foster innovative and creative industries have drawn multinational companies, highly qualified young professionals and student’s attention.

Demography in Portugal, as in other European countries, has been struggling and its population is ageing. Experts say that the

birth rate decrease can be offset by strong immigration growth, originated by recent economic development. This uptrend has been responsible for the return of young Portuguese emigrants, who left the country in the last decade, and for the increasing number of international workers and students living in the country.

Higher Education Context Higher Education is evolving and is gaining an international reputation. The quality of English taught programs in Portuguese universities has been recognised by international rankings, leading to a sustained growth of international students enrolled. In this regard government institutions and universities have made efforts to implement strategies focused on the internationalization of education. The government, AICEP, universities and embassies are developing a national policy to promote Education as an export sector with all entities working in the same direction. This group is making efforts to attract international investors to develop student accommodation and bring students from overseas markets like Angola, Brazil, China, Colombia, Equator, Luxemburg, Macau, Mozambique and Peru.

8% 8% 8% 7% 7% 7% 5% 4%

Night life

2%

Portuguese food

Education Quality Quality of Life Culture

Millennials are the new nomads. They look for destinations that offer good quality of life, highquality universities, safety and a cosmopolitan lifestyle. Portugal therefore is increasingly sought after by international students to live.

Municipalities have been working alongside this partnership to innovate and modernize their infrastructures, to create technological and entrepreneurial hubs and to organize recognized international events, like Web Summit, which increase country’s notoriety, reputation and attention from the international audience.

The country’s attributes match with students’ requirements, originating a strong growth of international students and an imbalance between supply and demand of quality accommodation. This situation is creating a huge opportunity for investors to develop and operate private PBSA in main student cities, where this market is taking the first steps.

Web Summit 2018 The word's largest tech event chose Lisbon to host the conference during 10 years.

70,000 attendees 1,800 start-ups 1,500 investors 1,200 speakers

2,600 journalists 159 countries 97,000 Portuguese egg

Beach

Quality of life Lifestyle Programs taught in English Safety and security Quality of universities Good weather Low cost of living Welcoming people Low cost of accommodation Programs ranking Cultural diversity

The increasing students’ demand and the pressure on the residential prices have been pushing PBSA rents.

Maria Empis Head of Strategic Consultancy & Research

custard tarts

Source: JLL Survey within Nova SBE and ISEG students.

Portugal Student Housing 2019 Report 15

14 Portugal Student Housing 2019 Report

Students Evolution 70,000

389,841 60,000

57,595 403,445

3%

5% 50,000

5%

58,877

4%

Students Evolution 397,337 7%

59,800

5%

60,095

59,235

378,453 6%

370,996 7%

8%

9%

40,000

Students

30,000

97%

95% 20,000

2016 proved to be a year of change! The downtrend observed in the number of students since 2010 was inverted. The increase of international students has offset the decrease of Portuguese ones, contributing in 2017/2018 to a Year-on-Year growth of 3% in the total number of students, to 372,800. This growth is due to 49,700 international students that have increased 17% comparing to last year. From the international students, more than 50% are originally from CPLP countries, confirming the strong connection among Portuguese speaking countries, nonetheless, the diversity of nationalities is increasing.

13%

372,800 Students

96%

93%

95%

92%

94%

91%

9% 93%

91%

8%

11%

92%

56,306

55,806

358,193

89%

9%

361,943

372,753

12%

13%

91%

88%

10%

90%

87%

10,000 0 2010/20112011/20122011/20122012/2013 2012/2013 2013/2014 2013/2014 2014/2015 2014/2015 2015/2016 2015/2016 2009/2010 2009/2010 2010/2011 2009/20102 010/2011 2011/20122 012/2013 2013/20142 014/2015 2015/20162 Portuguese

2016/2017 2016/2017 016/2017

2017/2018 2017/2018

International Source: DGEEC

Top 10 Portugal International Students Origins Ranking 2018/2019

Brazil - 16,281

Angola- 3,981 Spain - 3,607 Italy - 2,995 Cape Verde - 2,946 France - 1,818 Germany - 1,781 Saint Tome and Principe - 1,267 Poland - 1,241 China - 1,140

49,700 International Students 170 Nationalities 156% International Students

Growth 2009/10 – 2017/18

52%

of International Students are from Portuguese speaking countries

87% Portuguese

The demand for student accommodation is not only represented by international students, but also by Portuguese students who study and live away from their hometown. In 2017/2018 both segments represented more than 165,000 students who needed accommodation, ranging from relatives’ home to PBSA.

95%

55,572

358,450

115,800 Portuguese students out of their hometown 31% of total students

International Source: DGEEC

Top 5 Portuguese cities with more students 4 2

Mckinsey&Company estimates that international income of Higher Education in Portugal might reach €1.4bn by 2020.

Experts say that new innovative and forward thinking university campus can generate an additional 10% to the local GDP.

Source: DGEEC

5 3

1

1 - Lisbon % of total students living out of their hometown

116,676

58,193

35,272

19,006

12,287

51%

44%

67%

42%

58%

Source: DGEEC

Private Apartments

individual apartments owned and managed by private landlords Facilities: wide range of quality FF&E: range from none to full house appliances Services: no services Target: National & international | All incomes Marketed by: word of mouth, Facebook, Real Estate Brokers and online platforms such as Uniplaces or Airbnb

Private Apartments Operators group of apartments managed by professional operators

Facilities: wide range of quality FF&E: complete Services: laundry and cleaning (usually not included) Target: National & international (mainly Erasmus) | Medium income Marketed by: own booking online platform, Facebook and Uniplaces

7

th

Accommodation The supply of student accommodation in Portugal is still very informal and unstructured. The majority of Portuguese universities offer student accommodation, however it is usually associated to social services for students with low income. These types of residences, usually located near to the university, have often outdated facilities and ask for low rents. Nevertheless, the total number of rooms in this category is relatively small and the PBSA

Portugal Student Housing 2019 Report 17

16 Portugal Student Housing 2019 Report

market is extremely recent (in Lisbon the first private residence was built in 2001 and all the others are very recent). Consequently, the private apartments for long-term lease have been the main option for students that often rent non-regulated units in an informal market. Prices vary widely since the category, quality, amenities & services, size and types of rooms offered can be very different.

University & Religious Student Housing

PBSA managed by Universities or Religious institutions Facilities: outdated, with several common areas FF&E: complete Services: cleaning, laundry and some include catering Target: National | Medium and Low income Marketed by: universities and religious institutions which have a very bureaucratic process

Private Student Housing

private PBSA owned and managed by professional investors and operators Facilities: modern with international quality standards, include several common areas, such as gym or cinema FF&E: complete Services: cleaning, laundry, catering and concierge services, among others (included and not included) Target: International & national | High income Marketed by: own booking online platform, Facebook and Uniplaces

most chosen destination within Erasmus. Quality of life and the good reputation of Portuguese universities are the main attributes considered.

23

th

quality of the education system: quality of future workforce (Competitivity ranking of the World Economic Forum 20182019, 140 countries)

We continue to see a huge demand and supply imbalance in the market. The number of PBSA is scarce and finding quality in other types of accommodation is a difficult task for students. Thus, we estimate that in Lisbon, Porto and Coimbra there is a shortage of 14,000 to 20,000 beds with European quality standards.

Currently, the growing attractiveness of Portugal as a student destination and the fact that the student housing market is still nonconsolidated provides an opportunity for investors, established operators and new entrants, aiming to take advantage of the shortage of supply.

Investors and operators have been active looking for plots or old buildings to refurbish in the main cities. However the pure residential market has been very active too, leading prices to climb, making it difficult for the student housing developers to find good assets, well located and for affordable prices.

Carcavelos campus:

1

st

best country in Europe for expats to live (source:Expat Insider 2018, Internations)

The Nova SBE Campus in Carcavelos results from a partnership between Cascais Municipality and Nova SBE Foundation. The Campus will host more than 5,000 students. Since 2011, Nova SBE registered a yearly growth of 30% in master's applications, 54% of which are international. It already hosts almost 1,000 international students.

Triple crown

The Nova SBE Campus together with NCI Academy from NATO has created a new centrality in Cascais for more than 10,000 students. Therefore, there will be more than 1,000 PBSA beds that will be managed by Portuguese and international operators.

two Portuguese Bussiness Schools with triple accreditation.

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18 Portugal Student Housing 2019 Report

Lisbon Lisbon is the capital and the largest city in Portugal. Located on the banks of the Tagus River, Lisbon is becoming increasingly cosmopolitan, innovative and creative. It is rich in culture, architecture, food, music and night life, offering an eclectic selection of experiences.

Due to a great ambition and global strategy, Lisbon was placed in an unparalleled growth and entrepreneurial trajectory.

Safest capital in Europe by Eurostat – 2010 report 220 sunshine days per year 1st European Surf Reserve (Save the Waves Coalition)

Top 10 Nos Alive was considered one of the best music festivals, by CNN

5th best city for Startups, World Economic Forum, low

wages, low cost of office space and availability of talent It is already common to say that Lisbon is fashionable, just walk around the city, read newspapers, go through social networks or talk to foreigners to realise an undeniable reality: there is a dynamism, modern feel and a new centrality that have come to stay. Lisbon is a vibrant city and considered to be one of the safest in the world, visited by millions of tourists and receiving an increasing number of international students and young entrepreneurs.

Lisbon counts 116,700 students, representing 31% of total students in Portugal. It also has the highest share of international ones, totaling 17,900 students. In addition to this, there are 41,600 Portuguese students living out of their hometown, totaling more than 59,000 students with accommodations needs.

Following the national trend, international students are responsible for the turnaround in the decrease of the number of students, showing the importance of this market.

19

accelerators

start-up investors – venture capital

26

co-works

Innovative city 1

10

creative hubs

46%

of International Students are from Portuguese speaking countries

41,600 Portuguese students out of

85%

their hometown 36% of total students

Portuguese Portuguese

International

International

Source: DGEEC

Students Evolution 133,439

132,164

7%

7%

10%

93%

93%

90%

010/2011 2010/2011

2011/20122 2011/2012

128,938

2009/20102 2009/2010

124,175

123,002

120,385

10%

11%

12%

90%

89%

2013/20142 2013/2014

012/2013 2012/2013

Portuguese

International

Portuguese

112,729

113,544

116,676

13%

14%

15%

88%

87%

86%

85%

014/2015 2014/2015

2015/20162 2015/2016

016/2017 2016/2017

2017/18 2017/2018

International Source: DGEEC

University Rankings

#1 #1 #4 #17 #19

Nova IMS: Best masters of Information Management in the world, by EDUniversal Nova SBE & Católica: MBA in Europe in International Course Experience, by Financial Times Nova SBE: Best masters in Economics in Europe, by EDUniversal

The strong demand from international students in Lisbon has led some universities investing in new campuses: The Nova SBE campus was totally financed by private donations in a total of €55 million;

Nova SBE: Best masters in Management in the world, by Financial Times

The Nova SBE and NATO NCI Academy in Carcavelos have

Nova SBE: Best masters in Finance in the world, by Financial Times

Europeia University is building a new Campus in Telheiras;

capacity for more than 10,000 students; Católica is developing the Medicine School with capacity for 1,000 students;

Top 5 fields of study by international students

4

15

Growth 2009/10 – 2017/18

Students

Students

6

housing for startup founders and employees

116,700

Lisbon is the main economic and financial centre, generating €64bn, 37% of Portugal’s GDP. The rapidly expanding start-up, sharing services and nearshoring services sectors have helped attract a number of new start-ups, some of the world’s largest companies, new infrastructures and an increasing number of hubs and incubators spread all over the city.

The municipality and government entities are working together, and several investments are under analysis. A highlight for investments on transport network, which encompasses more buses and trams and the construction of new underground stations to connect the city centre to the outskirts.

Simultaneously, the municipality is investing in the sharing economy namely in electric bicycles.

17,900 International Students 151 Nationalities 98% International Students

15%

Management & Economics

Fablabs

start-up incubators Source:Lisbon Municipaly

4,810

University of Lisbon is investing in Student Housing to host more than 1,100 students across the capital;

Arts & Humanities

4,125

The Aga Khan Foundation is investing more than €80 million

Law

2,056

in an Academy in Oeiras;

Engineering

1,736

Medicine

1,640

The Champalimaud Foundation will invest €50 million in the

Source: DGEEC

new research center in Algés.

Image source: GCP Student Living, Scape Wembley Portugal Student Housing 2019 Report 21

20 Portugal Student Housing 2019 Report

Accommodation Most of the student accommodation offered in Lisbon are Private Apartments. The Uniplaces platform holds more than 5,790 units, which could vary from a simple room to apartments. However, this number can be larger counting the supply that is marketed on Facebook, by word of mouth, Airbnb or other real estate brokers and booking platforms.

Lisbon has 1,800 rooms at 33 University and Religious Student Housing. Usually they offer low rents ranging from €160 to €480/

month/room. There are also some residences, such as Montes Claros, which include catering services, marketing higher prices up to €650/month/room.

Private Student Housing 4%

Individual Suite

22%

Individual Studio

12%

Average Monthly Rent

5 months

Double Suite Individual

14%

Average Stay

Apartment

Source: Uniplaces

Double Studio

40% Regarding Private Apartments Operators, JLL count more than 17 players with a total supply of 1,490 rooms. Smart studios is one of the best operators offering high quality accommodation in the form of studios, rooms with private bathroom and kitchenette.

The Private Student Housing market has the smallest market share and currently there are only 8 units around the city, constituting a total of 700 rooms with 740 beds. In this category, individual suites and studios represent the majority of rooms offered.

East Lisbon Student Village comes up as the trendiest residence and Uhub has 3 PBSA under operation. Smart Studios will develop its first PBSA in Carcavelos with more than 300 rooms, while Collegiate is currently the most luxurious and largest PBSA in Portugal followed by Milestone in Carcavelos with 122 rooms.

Private Apartments Operators

Source: JLL

Private Apartments

5,790 rooms Prices: €125-€920

*data registered at Uniplaces platform

1,800 rooms Prices: €160-€650

University & Religious Student Housing

* highest price includes catering

Double Suite

58%

Source: JLL

At the moment, JLL expects a shortage around 22,000 beds with quality and services. Taking this into account, the PBSA market is emerging in order to face the new demand. The current interest from international and national private investors and operators represents a pipeline of about 5,000 PBSA beds in the next 3 years.

Temprano Capital Partners has acquired a plot to build 504 single and double studios until 2020 that will be operated by Livensa Living. The Student Hotel is developing 435 studios and Milsetone 200 studios in Carcavelos close to Nova SBE and NCI Academy.

Uhub and Student Ville will build more than 1,000 and 100 PBSA beds, respectively. Following this trend, University of Lisbon has under development 1,130 beds.

Students want to live close to the university or in the city centres, in zones with good public transportation networks, but the increasing demand for real estate in the Lisbon city centre, namely for residential schemes, is causing great pressure on prices of available plots and buildings. According to a survey that JLL undertook with students from Nova SBE and ISEG, the average commute time is 20/30 min walking, using public transportation, electric scooters or bicycles, which are increasingly used as a new way of transport offered by the municipality. So student housing investors are looking at alternative locations.

Where to develop?

Tier 2

Almirante Reis, Campolide, Alcântara, Belém and Telheiras

Private Apartments Operators

Individual Studio Individual Double

for student accommodation which includes the

buildings for 11,500 beds, during the next 10 years.

Average Monthly Rents, per room -

1,490 rooms Prices: €250-€950 33%

The Government has launched a national program

construction and refurbishment of more than 250

8%

€620

The PBSA occupancy rate achieves almost 100%. During the academic year, Lisbon PBSA are full, being international students the main residents. During the summer months, the occupancy rate can be improved with students enrolled in summer courses and tourists. Due to the lack of beds for international students, hostels have also become a player in this market, taking advantage of students’ high season during the semesters.

Private Student Housing

700 rooms Prices: €385-€1,635

Tier 1

City Centre and locations close to main universities Source: JLL & Uniplaces

Tier 3

Olaias, Olivais, Alta Lisboa, Beato

€ 1,200 € 1,000 € 800 € 600 € 400 € 200 € 0

€ 886

Studio

€ 1 ,042

T1

€ 641

€ 607

T2

T3 Source:Uniplaces

Portugal Student Housing 2019 Report 23

22 Portugal Student Housing 2019 Report

Porto Porto is synonym of history, architecture, culture, wine and gastronomy, trade and discoveries. Porto emanates alternative lifestyles and chill-out environments ideal for creative forward thinkers and young entrepreneurs. Like Lisbon, Porto is birth of several start-ups and a safe heaven for international investors and avant-garde businesses like Farfetch. Porto is full of life where different cultures mix, being a source of inspiration for artists.

Students Evolution Students Evolution 70,000 60,000 50,000

20,000

Students

by European Best Destinations

Best Architecture of Public Buildings

Leixões Cruise Terminal - by ArchDaily, 2017

The Unesco World Heritage Site distinction associated with low cost airlines and the international awards and media buzz brought an amazing dynamism to the Invicta. The downtown, which is now very fashionable in all market sectors, is increasingly sought after, taking advantage of its tourism growth. The second largest Portuguese city comes up as an option for setting up shared services companies.

The “Invicta” city is under a major refurbishment as Lisbon is undertaking in its historical centre. National and international investors are buying properties and developing real estate projects in Porto. Lionesa is at the forefront of an innovative trend that arrived a few years ago. It assumes itself as a new living office complex having undergone an investment of €100M to expand its facilities. Along the same lines, a new culture and touristic project is emerging in the other side of the river, the World of Wine, a project of more than €100M to praise Porto Wine. In order to face the current tourism demand the airport will be expanded.

58,200

60,095

59,235

5%

6%

7%

97%

96%

95%

94%

93%

2009/2010 2009/20102

2010/2011 010/2011

2011/2012 2011/20122

55,572

55,806

56,306

58,193

8%

9%

10%

13%

92%

91%

90%

87%

0

Following the national trend and in line with Lisbon, international students are responsible for the turnaround in the decrease of the number of students, evidencing the importance of this market.

They prefer to live in the city centre close to the universities and historical centre, near the nightlife and in areas with good public transportation networks; despite the average commute time which is 10/25 min using public transportation or walking.

2012/2013 012/2013 Portuguese

2013/2014 2013/20142

2015/2016 2015/20162

2016/2017 016/2017

2017/2018 2017/2018

International

Portuguese

2014/2015 014/2015

International Source: DGEEC

Top 5 fields of study by international students Medicine

1,426

Law & Management

1,342

Arts & Humanities

1,341

Engineering

1,312

Architecture & Construction

400 Source: DGEEC

19%

Y-o-Y growth in the number of passengers

Francisco Sá Carneiro Airport, during the first half of the year. in

Source: DGEEC

Growth 2009/10 – 2017/18

55%

of International Students are from Portuguese speaking countries

Students

87% Portuguese

59,800

10,000

Porto has become fashionable and thus the number of students is continuously growing, reaching 58,200 and representing 16% of total students in Portugal. We are witnessing an increasing and diverse number of nationalities coming straight to Porto, counting more than 7,400 foreign students. In addition, there are 18,000 Portuguese students living out of their hometown, totaling more than 25,000 students with accommodations needs.

7,400 International Students 120 Nationalities 268% International Students

13%

58,877 4%

40,000 30,000

Best European Destination

57,595 3%

18,000 Portuguese students out of their hometown 31 % of total students

International Image source: Urbanest, Vine Street

Portugal Student Housing 2019 Report 25

24 Portugal Student Housing 2019 Report

University of Porto

Spru World, located besides Campanhã Train Station, is by far the largest player with 195 individual studios which prices range from €380 to €720. Nevertheless, PortoAlto is the best PBSA with the highest standards of quality. Opened in 2017, it is also the most recent, offering 45 comfortable individual and double studios at €420 and €650.

is one of the largest universities in Portugal with the largest number of international students, (more than 4,600).

Taking into account the new reality, the PBSA market is emerging in order to face the new demand.

Most of student accommodation offered in Porto are Private Apartments. At Uniplaces platform there are more than 2,220 units, which could vary from a simple room to apartments.

However, this number can be larger counting the supply that is marketed on Facebook, by word of mouth or Airbnb.

Private Student Housing 2% 2%

5%

Individual Studio

6%

Double Studio Individual Suite

Porto has 1,250 rooms at 15 University and Religious Student Housing. Usually they offer low rents ranging from €165 to €430/ month/room.

Regarding Private Apartment Operators, JLL count more than 11 players with a total supply of 420 rooms. The existent operators are small.

The PBSA occupancy rate achieves almost 100%. During the academic year, Porto PBSA are full, with international students as the main residents. During the summer months, the occupancy rate can be improved with students enrolled in summer courses and tourists.

Individual Room Double Room Apartment

84% Source: JLL

Private Apartments Operators % Porto Private Student Housing

% Private Apartments Operators 2%5% 2%

Individual Studio

6%

Private Apartments

2,220 rooms Prices: €110-€680

*data registered at Uniplaces platform

Double Studio

36%

Individual Suite

Individual Room

Individual Room

Double Room

64%

Double Room

1,250 rooms Prices: €165-€430

University & Religious Student Housing

Currently, JLL estimates a lack of about 10,000 beds with European quality standards. In this way, some international investors have been looking to the Porto PBSA market with interest, representing a pipeline of about 4,000 beds. The Nido, Milestone and Livensa Living will manage over 1,800 beds, currently under construction, in Asprela University Campus.

Milestone will manage 220 beds in single rooms and Livensa Living will manage 722 beds in single and double rooms. Both schemes are due to open in September 2019. There are 4 more student housings projected for Asprela, with over of 1,700 beds.

Contrary to Lisbon, it is still possible to buy plots or buildings to develop or refurbish in the centre of Porto or close to universities at affordable prices, but we expect that this window of opportunity will close in the near future as real estate demand will increase.

€550

Average Monthly Rent

* highest price includes catering

Apartment Private Apartments Operators

84%

Due to the lack of beds for international students, hostels have also become players in this market, taking advantage of students’ high season during the semesters.

420 rooms Prices: €200-€490

5 months Average Stay

Source: Uniplaces

Average Monthly Rents, per room

Source: JLL

€ 1 000

The Private Student Housing market has the smallest market share and currently there are only 4 units around the city, constituting a total of 290 rooms with 320 beds. In this category, individual studios represent 84% of total rooms offered in this category.

Private Student Housing

€ 800

€ 699

€ 793

€ 600

290 rooms Prices: €245-€650

€ 484

€ 449

T2

T3

€ 400 € 200 € 0

Studio

T1

Source:Uniplaces Source: JLL & Uniplaces

Portugal Student Housing 2019 Report 27

26 Portugal Student Housing 2019 Report

Coimbra Coimbra is a Unesco World Heritage Site due to its importance in the fields of knowledge.

The University of Coimbra was founded by the King. D. Dinis back in 1290 and it was the first university in Portugal, one of the oldest in the world.

Coimbra is the third student city in Portugal and the most important in terms of Brazilian students. It hosts about 2,300 Brazilians driven by the university history and reputation. The traditional student residences named Repúblicas, the traditional singing and dancing group of university students, Tunas, and the student party spirit allow Coimbra to offer a special and cozy environment for students, a unique lifestyle.

Medicine

1,627

Law

854

Arts & Humanities

524

Engineering

449

Management & Economics

374 Source: DGEEC

In terms of supply, University of Coimbra has 14 student housings with a capacity for 1,320 beds. Prices range between €73 and €450.

The Instituto Politécnico de Coimbra has 3 student housings with 350 beds and prices range from €73 to €150. The Nursing School has 170 beds with prices ranging between €80 and €450.

Private Apartments

1,200 rooms Prices: €110-€595

*data registered at Uniplaces platform

Concerning private accommodation, the Private Apartments Operator Smart Studios has 40 studios with prices ranging from €260 to €380, and there are 1,130 private apartments, according to Uniplaces. Smart Studios stands out as a professional operator that manages accommodation studios with high quality standards. In terms of private PBSA, The Student Ville is the first one, opened in 2018 with 70 beds and prices ranging between €410 - €775.

900 rooms Prices: €70-€450

University & Religious Student Housing

* highest price includes catering

40 rooms Prices: €260-€380

Due to an increasing number of international students, international operators like Livensa Living that will manage 349 studios, are looking. at the market with interest to develop private schemes soon.

Private Apartments Operators

Students Evolution 37,420

37,624

37,304

37,082

10%

35,177

11%

11%

34,623

34,757

35,272

9%

11%

12%

13%

15%

93%

91%

90%

89%

89%

89%

88%

87%

85%

2009/2010

2010/2011

2012/2013

2013/2014

2015/2016

2016/2017

2017/2018

34,453 7%

€310

Private Student Housing

70 rooms Prices: €410-€775

Average Monthly Rent

5 months Average Stay

Source: Uniplaces

15%

35,270 Students

Portuguese

5,120 International Students 100 Nationalities 121% International Students

International

2014/2015

Source: DGEEC

Average Monthly Rents, per room

Growth 2009/10 – 2016/17

55% of International Students are from Portuguese

speaking countries

85%

2011/2012

Source: JLL & Uniplaces

18,500 Portuguese students out of their hometown 52% of total students

€ € € € € €

600 500 400 300 200 100 € 0

€ 496 € 363

Studio

€ 317

T1

T2

€ 234

T3

Source:Uniplaces Source: JLL Image source: Unite, Angel Lane

28 Portugal Student Housing 2019 Report

Conclusion USA and China are undoubtedly the major players in the international students' market. They are the largest hosting country and source of international students, respectively. Europe is the main destination for international students, reaching 1.9 million students in 2015. USA and UK, host more than 30% of world international students, dominating the upper end of global university rankings.

The current international landscape is marked by a changing demography that impacts on the higher education panorama with consequences for the Student Housing market. The ageing population in Europe and North America contrasts with the increasing African and Asian populations’ rejuvenation.

Millennials are the main driver of Higher Education and their needs raise new challenges. They are increasingly demanding and international. Their way of thinking and living require universities and student housing players to always adapt to their constant changing reality. They look for Flexibility and Experience, being always Connected. In order to meet their requirements investors are set to design a new type of PBSA that offers an alternative concept of housing and a new lifestyle. It is a forward thinking concept designed mainly for Millennials to live, study, work and socialize.

Momentum in the continental European market is starting to grow as established operators, international investors and new entrants look for opportunities on the continent, supported by favorable supply and demand imbalances in less mature markets. While the main markets across Europe are all under-supplied in terms of student housing, the sector in each country is at different maturity stages. Spain and Portugal, as emerging markets, are arousing a growing interest from investors.

Although Portugal has seen a steady decrease in the total number of students in the last years, 2016 showed a reversal in the downtrend, increasing to 372,800 students. The number of international students more than doubled since 2010, reaching to 49,700. The quality of Portuguese universities is climbing in the international rankings and the number of English taught programs is growing. The fact that Portugal attributes match with international students’ requirements creates an opportunity for the Higher Education sector to grow. JLL estimates a shortage of 20,000-35,000 beds with European quality standards in Lisbon, Porto and Coimbra.

The main cities, Lisbon, Porto and Coimbra, are characterized by the large supply of private apartments available in an unstructured market, where the supply quality doesn’t meet the European standards of quality. Private Apartments Operators emerge as an important market player that manage portfolios of apartments in a professional way, offering services and amenities that can reach the European PBSA standards. More structured, but less modern, the University and Religious Student Housings are available all around the cities mainly close to universities and are the first option for students with low income. This type of accommodation offers a large range of services and some amenities, but most of them are outdated. Therefore, the Government launched a national program to develop 11,500 beds in the next 10 years, for which the concession model for private operators and developers may be applied as in the case of University of Évora.

The last, but not the least, Private Student Housing is the most recent market segment in Portugal with great potential to grow.

In the last 3 years, some private PBSA have opened in Lisbon and Porto, offering the best conditions to students that aspire to live in welcoming communities. The occupancy rate of almost 100% shows the need for more and differentiated PBSA for an increasing international students’ community. Hence, the main international operators already have an interesting pipeline, representing a total of 10,000 private beds in the next 5 years in the main cities.

Portugal Student Housing 2019 Report 29

30 Portugal Student Housing 2019 Report

Portugal Student Housing 2019 Report 31

Contacts JLL Offices Lisbon

Porto

Edifício Heron Castilho Rua Braamcamp, nº 40 - 8º 1250-050 Lisbon +351 213 583 222

Rua Mouzinho da Silveira, 324 4050-127 Porto +351 225 431 090

www.jll.pt

Pedro Lancastre

Maria Empis

Fernando Ferreira

Managing Director pedro.lancastre@eu.jll.com

Head of Strategic Consultancy & Research maria.empis@eu.jll.com

Head of Capital Markets fernando.ferreira@eu.jll.com

Gonçalo Santos

Head of Development Solutions goncalo.santos@eu.jll.com

Uniplaces Offices Lisbon

Largo Duque do Cadaval, nº 17, Fração I 1200-160 Lisbon

www.uniplaces.pt

Cyril Jessua

André Rodrigues Pereira

CEO Uniplaces, cyril.jessua@uniplaces.com

General Manager for Portugal andre.pereira@uniplaces.com

AMI JLL - 8654 © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy there of.