Student condos graduate into an important asset class

Full Service Management means Hands-Free Investing

In a further sign that the student housing segment is maturing in Canada, the sector is fast developing differentiated offerings that are more than simple accommodation; at the upper end of the segment comes the ‘branded student lifestyle’ offering. Similar to the high-end seniors lifestyle developments, these student total-lifestyle condos are designed from the ground up to be value-added student condo communities offering a full range of luxury living amenities like pools, some even staffed to offer special interest programs and Housekeeping Services for a hotel-like experience. Not surprisingly, these valueadded condos command higher rents than either traditional condos or ordinary student residences, for a higher investment return. Upkeep can also be managed on behalf of out-of-town owners to ensure higher resale value down the road. A recognized builder of lifestyle communities, Ashcroft Homes has entered this emerging Value-Added category with ENVIE. Like sister brand, ALVIDA LIFESTYLES for seniors’ living, ENVIEbrings ValueAdded Property Management to the student accommodation market with the ENVIE Student Life Program. To support the wide range of activities that ENVIE will offer to residents, Ashcroft has designed a higher level of amenities right into its Capital Hall project opening soon. In addition to a 4,000 sq.ft. ground floor retail zone with coffee shop, there will be 8,000 sq.ft. of student-directed amenities. These will include a lobby lounge where residents can meet and mingle, private study niches, a GamesRoom, an equipped gym and more than 75,000 sq.ft. of landscaped courtyard and outdoor communal space. There is a 24-hour concierge on duty and housekeeping is available - a highly desirable amenity according to Ashcroft’s research. Achieving success is challenging enough without the hassle of living in ‘student digs’ that are substandard and insufficient. Privately constructed, purpose-built student condominiums are an answer to this very real need while improving student living; even marks. Tuition costs as well as a competitive job market for graduates mean that today’s serious students are choosing purpose built and professionally managed accommodation with fewer roommates so they can focus on their studies. In particular, international students and their parents with resources demand clean, safe accommodation. Many come from China and South Asia, assisted by the government’s Student Partners Program operating in China and India. Located near a major university that has a strong international reputation, student housing projects come in all shapes and sizes from the boutique-type to large multitower communities. Many have convenient retail in the complex such as grocery and convenience stores. Architecture and features are designed expressly to enrich student living with amenities such as study niches, WiFi, meeting rooms, gyms, outdoor courtyards and more. Suites are of high quality and are rented furnished. While Canadian universities are pleased with the growing international student enrolments, that coupled with the continued strong levels among domestic students is putting pressure on growth prospects due to a housing shortage, particularly as international students often take up universities’ first-year residence guarantee. It is this built-in demand that makes student housing a growing asset class among investors who see all the factors in place for success; a recession-proof, demanddriven, renewing, medium term investment backed by high quality tenants who often have family or government financial support. Even more appealing, the properties are professionally managed making them ideal for out-of-town investors. Traditionally the only way for an individual investor to own Student Housing was to purchase a house in the ‘student ghetto’ and spend considerable time and money managing the property and the tenants. These house values are driven by the rental rates next to major universities and can be expensive, often starting at $700,000 and up – far more than new student condominiums on offer. Since the emergence of the student housing segment in the Canadian market less than 5 years ago, the number of projects has increased with no sign of slowing in this country any more than in mature US and UK markets where the trend began over a decade ago, and remains both vibrant and growing.