Dubai’s student accommodation market is becoming a high growth opportunity for real estate investors as the city continues to grow as a hub for private higher education.
Research commissioned by ENBD REIT (CEIC) Limited (“ENBD REIT”), the Shari’a compliant real estate investment trust managed by Emirates NBD Asset Management Limited, has found that Dubai’s market is ripe for investment in an emerging student accommodation asset class.
With the world’s highest concentration of private branch campuses located in Dubai and more than 100,000 student enrolments at new UAE institutions recorded in last 12 years, more units will be needed to meet this high demand, creating a growth market for both the real estate and construction industries.
Enrolments in Dubai have increased at an annual growth rate of 6.4% to over 60,000 students currently studying in the city since 2009, according to data from ENBD REIT and GSA.
Anthony Taylor, fund manager at ENBD REIT, said: “With student enrolments in Dubai growing quickly, accommodation supply has some catching up to do. Total student accommodation beds in the city currently stand at around 4,000, providing for just 6.5% of all enrolled students.
“Compared with a mature higher education market such as the UK, which provides for around 24%, there is an obvious opportunity to develop more purpose-built student residences.
“Having recently acquired GSA’s newly completed Uninest Dubailand building, our team is now on the look-out for similar assets or developments, which we believe will deliver attractive yields,” he added.
The student accommodation market currently has a strong track record for rental growth against other types of real estate and could prove a strong market for investors in Dubai seeking consistent income from assets experiencing a high level of demand, research found.
Dubai is the single largest market for global branch campuses, with 10 different types of international curriculum offered across 24 institutions.