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The sprawling investments of private schools in the real estate market

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It is on the banks of the Seine in Suresnes (Hauts-de-Seine), a few minutes from Paris la Défense, that Skema Business School has set up its Ile-de-France campus. The building and its 1,500 square meters of terrace face the green lake of the Bois de Boulogne and the Gustave Eiffel tower. The students crossed in the maze of glass and metal agree in a few words: It’s nice “. “It’s the Ferrari of the campuses”, adds, satisfied, Allal, 23 years old, student in a master’s degree in auditing and management control. At the beginning of the XXe century, the site bore on its soil the aeronautical factories of the industrialist Louis Blériot. Modern and sparkling, the setting now welcomes 2,500 students from the Ile-de-France region.

This construction of 15,000 square meters at 100 million euros – partially financed by a loan over twenty years – symbolizes the good health of business schools, underlined by a study published in October by CBRE, a consulting group in business real estate. . Marginal only a few years ago, the share of higher education now reaches 12% of major real estate transactions (in business volume) in Ile-de-France and 30% in the regions.

It is demographics that explains this rise in power of real estate projects by private higher education establishments. The high French birth rate between 2000 and 2015 translates each year into significant flows of students, a phenomenon which should extend until 2025, at least. If the university absorbs the largest share of new graduates, it is in private education that the increase is the strongest. In twenty years, student enrollment in these establishments has doubled, while it has increased by only 17% in public education. And since 2017, growth has been even faster, with staff increases of around 7% per year. The sector brought together 592,600 students at the start of the 2020 school year, according to data from the Ministry of Higher Education.

A demand that does not weaken

The rise of international mobility also implies a windfall of new customers for schools. In 2020, more than 370,000 foreign students chose a French institution to continue their studies, an increase of 23% in five years, according to Campus France. To accommodate this flow, “there is a growing need for buildings dedicated to private education, with larger and modular sites to optimize space”observes Thierry Molton, director of commercial real estate assets within the real estate group La Française Real Estate Managers.

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