As Japan pushes to encourage foreign students to enrol in Japanese universities, investors have recognised an opportunity in developing accommodation that caters to the needs of students coming to Japan.
Student accommodation in Tokyo
One such development is a nine-story building in the Hakusan district in Tokyo’s Bunkyo Ward. The accommodation was a joint venture between UK-based GSA, which specialises in providing student accommodations, and Tokyo-based investment firm Star Asia.
“We’ve entered the Japanese market primarily because there is a demand for student accommodations with quality global standards like this one, given Japan does not have enough,” said Taku Iwasaki, head of operations at GSA Star Asia KK.
The building features a café-style co-working area on the first floor where students can study and collaborate, while the second to eight floors are the students’ living areas. There they have tidy bedrooms, shared kitchens and common areas with video games, and a balcony on the roof where they can hang out.
Building student housing is likely to be a sound investment as people enrolling in universities is on the rise, and they’re willing to travel across the globe for higher education
Drive to encourage foreign students to Japan
In the past decade, Japan has been trying to promote its universities globally and entice fresh talent to the country. In 2011, Japan had only 163,697 foreign students enrolled in its colleges, however, that number almost doubled by May 2019 to 312,214.
With the number of foreign students choosing to study in Japan increasing, the type of accommodation offered by GSA and Star Asia is set to become more common, providing a golden opportunity for investors and developers to shift into the student housing market.
From a student’s perspective, this type of accommodation eliminates many of the headaches they face trying to rent somewhere in Japan, as the real estate industry is not very welcoming towards non-Japanese tenants.
Accommodation market set to grow in the future
GSA currently has 47 student accommodations around the world, and has plans to provide between 5,000 to 7,000 beds to students in Japan in the next few years.
“It’s actually a very important growing sector within Japan’s higher education market,” Iwasaki said. “We expect competition to eventually heat up. It is only a matter of time because there are many established private equity funds and institutional investors that are investing in this space.”
Some of Japan’s major developers have also turned their attention towards the student accommodation market with Tokyu Land Corp. and Itochu Property Development having started building student housing in the last couple of years.
Building student housing is likely to be a sound investment as people enrolling in universities is on the rise, and they’re willing to travel across the globe for higher education. According to the UNESCO Institute for Statistics, international students worldwide rose by more than 25 per cent between 2012 and 2017.
What do you think of specialised student accommodation? Let us know your thoughts in the comments below.
"Otsumami" - a bite size snack:
Making it easier for foreign students to acquire accommodation in Japan will make the country a more viable and desirable destination for higher education.