Global Education Communities Corp.
Tailwinds from Robust Affordable Housing Demand and Falling Rates
Published: Dec 9, 2025
Author: FRC Analysts
Disclosure: Global Education Communities Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Company Details
Sector – N/A / Industry – Student Housing
Trading Information
Ticker & Exchange – GEC.TO : TSX
Report Highlights
- Following the divestment of its Sprott Shaw College (SSC) subsidiary for $35 M ($0.52/share) in August 2025, the company has fully transitioned into a pure-play student housing operator. Unlike traditional multifamily, student housing is a specialized asset class, typically offering higher rent per square foot and stronger yields for investors.
- Last month, Morgan Stanley Investment Management (NYSE: MS), and its partner, acquired an eight-property, 6,200-unit U.S. student-housing portfolio for $1.4B, implying a value of $162k per bed, very close to our $165k per bed valuation on GEC’s operating projects, as reported in our August 2025 report. Rental assets provide inflation-protected income with relatively low volatility, making them highly attractive to pension funds and institutional investors.
- FY2025 (ended August 2025) revenue for GEC’s flagship rental business declined 1% YoY, driven by an asset sale, but exceeded our estimate by 5%. Gross margins increased 3 pp to 59%, in line with our forecast.
- Recorded a $35M gain from the sale of SSC, and a $17M write-down on properties (5% of total value). Excluding the unexpected write-down, net income was $21M ($0.31/share) vs. our estimate of $0.37/share.
- Several Canadian REITs have taken property write-downs this year due to lower market rents and comparable property sales. We believe current valuations understate intrinsic value, as rents and property values have likely bottomed and should begin recovering in 2026, supported by falling rates, slower supply growth, and robust demand for affordable housing. As a result, GEC is likely to report substantial property valuation gains next year.
- Last month, Canada signaled a shift toward quality over quantity in international education, exempting master’s and PhD students at public institutions from study permit caps. This shift is positive for GEC, supporting demand for its Vancouver student housing projects amid prior uncertainty from tighter immigration rules.
- In another positive development, GEC made progress on the Richmond Atmosphere project, for which it had provided a $60M deposit. The project stalled in 2022 after the lender ceased funding, leading GEC to write off the investment. Last month, the BC Court of Appeal ruled in GEC’s favor, strengthening its legal position, and creating the possibility of recovering part or all of the $60M. We are not including potential upside from this for conservatism.
- With vacancies for affordable units in Vancouver (<$1,750/month) remaining below 1%, we maintain a positive outlook on the city’s student housing market.
- Relative to REITs, GEC is trading at 7x forward revenue (sector: 11x), and 14x forward EBITDA (sector: 19x), a 31% discount on average.
Price and Volume (1-year)
| YTD | 12M | |
| GEC | 86% | 46% |
| TSXV | 26% | 22% |
| Index (REIT) | 2% | -4% |
* Global Education Communities has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$ unless otherwise specified. Core Business Strategy
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
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