Forum Asset Management’s pending $1.7-billion acquisition of Alignvest Student Housing REIT's nationwide, 17-property portfolio is just one pillar in efforts to consolidate its position as Canada’s largest supplier of purpose-built student accommodations (PBSA).

"The majority of universities in Canada are facing significant fiscal pressures brought on by tuition freezes on domestic students,” Forum managing partner of real estate Aly Damji explained to RENX. “The ability for universities to construct student housing in a timely way without private sector support is difficult.”

This is one of the driving factors behind Forum wanting to become so involved with PBSA, as opposed to purpose-built rental housing for the general population.

“Unlike other mature English-speaking student housing markets in the U.S., the U.K. and Australia, Canada’s student housing market is in the early stages,” Damji observed.

Forum's Real Estate Income and Impact Fund is making the ASH REIT acquisition, which is scheduled to close before the end of 2024.

Canada has enough PBSA for 10 per cent of students compared to 27 per cent in the United States and 16 per cent in the United Kingdom, according to Damji. 

He added that off-campus PBSA accounts for 58 per cent of beds in the U.K., 60 per cent in the U.S. and 70 per cent in Australia, but just 30 per cent in Canada, citing statistics from BONARD, a global leader in student housing research.

Large shortfall in Canadian student housing

“They also estimated that there's a 400,000-bed shortfall in student housing in Canada, yet we know that there's only about 17,000 beds nationally under development,” Damji said. “To date, the rationale has been a lack of opportunity. With our acquisition of Alignvest, we'll change this. 

“We’ll own over 10,000 beds and have access to a growing development pipeline of 3,000 beds, starting from Day One, and we think that will continue to put a lot of eyes on the sector and create a truly investable asset class in Canada.”

The need for more PBSA is so great the federal government’s decision to cut the number of international students allowed into Canada is only expected to have a minor impact. 

Private colleges are being targeted more by those cuts than Forum’s target demographic, and its focus on what Damji called “ownership and development of institutional quality, purpose-built student housing assets located in the top publicly funded university and college markets across the country.”

Canada's 20 largest universities offer 170,000 beds for more than 1.5 million students. Estimates suggest only seven per cent of those requiring housing will secure on-campus accommodations.

This significant shortage in PBSA forces students into local rental markets, intensifying demand and driving up prices in an already strained housing environment.

ALMA @ Cabbagetown Toronto

In addition to the Alignvest acquisition, Forum also recently broke ground on ALMA @ Cabbagetown Toronto at 307 Sherbourne St., not far from Toronto Metropolitan University. 

ALMA is an urban lifestyle brand created by international design studio DesignAgency that has locations in Vancouver, Guelph, Ottawa, Montreal and Oshawa, with expansions planned across the country. 

The 15-storey ALMA @ Cabbagetown Toronto is approved to offer 236 beds in 192 fully furnished, self-contained units that will be complemented by common areas including a library, a fitness studio, co-working spaces and a variety of outdoor terraces. 

ALMA @ Cabbagetown Toronto will incorporate geothermal energy systems to significantly reduce the development's carbon footprint and operating costs.

“We're not building any balconies because balconies increase energy consumption,” Damji said. “We're hoping that this project will achieve the Canada Green Building Council zero carbon certification as well.”

Seeking to add more density

Forum is hoping to get approval from the City of Toronto to add three more storeys and increase the number of units to 223. Completion of the project is scheduled for September 2027.

ALMA @ Cabbagetown Toronto will have a mix of studios, one-, two- and three-bedroom units, with the smallest average unit size ever launched in Toronto. The average unit size will be about 320 square feet, with around 150 studios under 300 square feet.

“Smaller, compact and well-thought-out units equal a greater degree of attainability given the cost to build housing in today's market,” Damji said.

There will be one bathroom for every bedroom and each unit will have laundry facilities.

Forum’s existing student housing portfolio

Excluding the Alignvest acquisition, Forum currently has approximately 2,500 student housing beds in its portfolio. 

This includes:

• 1,518 beds at The Quad at Toronto’s York University;
• the first phase of ALMA @ Guelph, which involved acquiring and repositioning a former hotel to accommodate 180 beds for University of Guelph students;
• 211 beds at ALMA @ Oshawa, which is close to Ontario Tech University;
• and 543 beds in The ARC, which is located at the foot of the University of Manitoba campus in Winnipeg.

Forum also expects to close soon on the acquisition of 740 beds in downtown Ottawa in a project that will be called ALMA @ ByWard Market.

“It was an existing project that another developer built, but they're not that experienced with student housing, which requires a high degree of operating expertise,” Damji said. “The building has some vacancy in it but we're going to renovate the building, even though it's a new build, and reposition the building.”

Other future developments

Forum has another 3,000 student housing beds in its development pipeline.

The firm hopes to break ground on the third phase of The Quad at York late this year or early next year to deliver another 840 beds.

Forum is also looking to break ground early next year on its second phase in Guelph that will add another 587 beds.

“Then lastly, we have a number of other projects in the planning phase located from coast to coast, from Halifax to Ottawa to the lower mainland in Vancouver,” Damji said.