Several factors unique to the UAE market have a sizeable influence on the student housing opportunity which TCN has identified including the following:
- Proportionately larger share of international student enrolment
- As the UAE is a ‘’regional hub’’ with a high expatriate population, so too do the Universities in the UAE see a much higher proportionate share of international student enrolment.
- Wide variety of short-term housing options available due to the strong tourism market.
- On the supply side, the UAE’s market position as an international tourist destination has driven a wide variety and availability of short-term housing options and house-sharing arrangements. While not specifically marketed towards students, these housing options which are mostly aimed at tourists can be utilized by students to fulfil their housing needs.
- Cultural considerations which encourage the ‘’live at home’’ case for UAE Nationals and many Arab expatriates, traditional cultural influences tend to encourage students to live at home during their University study period, especially for females, as compared to the international standard.
Demand for student housing is present in the UAE market and should increase as more Universities open their doors and the UAE continues its development as a regional education ‘’hub’’ for higher learning. If executed correctly, student housing projects can yield significant returns with limited downside development risk. However, from a development perspective, it is not an ‘’easy money’’ project – it is an extremely niche product type with unique considerations and challenges. Location, design, deal structure, market positioning, cultural considerations, and the developer’s relationship with Universities are all critical success factors to consider. The Student Housing market in the UAE is still in its infancy and as developers start to specialize in this product type, a ‘’best practices’’ data set will start to merge. Until then, a wide variety of student housing projects are likely to enter the market with mixed success.