By the end of 2019, the existing supply of student housing in Dubai neared 5,200 beds across approximately 20 projects, concentrated in the Dubai International Academic City (DIAC), Dubai Land and Dubai Media City (DMC). By the end of 2020, more than 3,000 rooms will be added to this total.
Dubai’s student housing sector is expected to grow even further over the next few years —anticipated population growth across the emirate and overarching improvements to the UAE’s higher education sector are expected to increase the attractiveness of the higher education sector in Dubai and, in turn, drive up the demand for student housing across the emirate.
Several government initiatives are also expected to have a positive long-term impact on the outlook for the education sector in the UAE and, in turn, the outlook for the student housing market. The National Strategy for Higher Education 2030 is geared to boost the global competitiveness of the UAE’s education system. In 2019, the government allocated AED 10.2 billion — approximately 17% of the year’s federal budget — to strengthen the education sector. And recent reforms extended student residence visas in the UAE from one to five years.
The total number of university students in Dubai rose to 53,200 during the 2018-19 academic year. Of this, the number of international students in Dubai represented 66%. Moving forward, it is anticipated that the student share split by region will shift in line with wider macroeconomics trends, and the number of foreign students in Dubai will rise further, thereby escalating the demand for student housing.
As of now, off-campus residential buildings and non-affiliated off-campus student housing form the bulk of student accommodation in Dubai. The supply of Purpose-Built Student Accommodation (PBSA) is limited to developments such as the Uninest student accommodation in Dubai, the Myriad Dubai project and KSK Homes student accommodation in DIAC Dubai.
The demand for higher education in Dubai is expected to continue to increase, sequentially impacting student housing. But student housing in the UAE — and more specifically in Dubai — is still a relatively untapped market for investment opportunities in the UAE. Over the next few years, the student housing real estate investment market will graduate into one of the more attractive real estate investment opportunities in Dubai.
In this report, CBRE investigates the factors prompting the growth of the student housing real estate market in Dubai and the rising promise of student housing investment opportunities across the emirate.
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