While a number of industries have been heavily affected during the past 18 months, the higher education sector has remained resilient, building on its recent growth to demonstrate continued stability and a positive outlook. This has been driven by rising demand for education from developed to developing countries with global student numbers increasing to more than 228 million in 2019, growing by more than 6.8 percent in the past five years alone.

On the international stage, the United States continues to perform very strongly, with US universities comprising of 14 of the top 20 universities globally according to the Times Higher Education rankings, a resounding endorsement of the country’s university sector. Likewise, the US economy has arguably weathered the pandemic better than many, which is also reflected in university applications for Fall 2021, which are up 2.3 percent year on year.

This growth and resilience should not come as a surprise. Education is an economic catalyst for communities, with growing middle classes globally placing increased importance on qualifications, while other industries and sectors also benefit from its presence. In addition, the pursuit of education has become increasingly international, with the OECD predicting growth of international students by 2.3 million between 2019 and 2030. There is a thirst to be educated at leading international institutions, and it is clear the community experience of university is regarded as fundamentally enriching to the lives and prospects of young people.

No more so is that true than at the heart of university life and where students choose to live.

As universities consider how they create a thriving hub for students to enjoy and embrace, student housing is a key element of that journey, providing the very basis of the community in which they exist. This importance reflects why student housing has become such an attractive asset class within real estate in recent years — analysis by CBRE confirms that average occupancy for the whole of the US market was 91.7 percent in fourth quarter 2019 and fell only marginally to 88.0 percent in fourth quarter 2020. Furthermore, US rental growth for student housing is set to outperform multifamily housing and carries a lower rental default rate, proving extremely robust and resilient through the pandemic.

Evidence to date would suggest the US market mirrors the strength of the global outlook, with average annual rent increases of 3.3. percent per year in 2016 to 2019. Meanwhile, the imbalance of supply has seen average vacancy rates of less than 2.6 percent in that same time period, with new project deliveries for fall 2021 at their lowest level since the global financial crisis, which is likely to keep tension in prices. Further, trends in the US point to a real opportunity for student housing providers to help universities achieve their ambition to create fulfilling student experiences with new schemes being developed tightly around campus universities due to the well-resourced and competitive locations.

James Hunt is Managing Director, Real Estate for GSA. This article first appeared in Institutional Real Estate, Inc.