The past two years have seen a rapid increase
in the level of investment in UK student properties.
According to recent data, this trend shows no sign
report commissioned by Pinnacle MC Global Network,
which was titled Spotlight on UK Student Housing,
has concluded that 2014 is likely to see a continuation
of "high levels of investment activity."
The report also revealed that the first four months
of 2014 had seen around £950 million worth of
transactions, totalling 17,000 student beds. The report
went on to highlight the fact that "This is above
the level seen in the same period of 2013, it is well
above previous years including 2012. With a further
£1.4bn worth of investments on the market we
can expect to see activity in the region of £2.5bn
by the year-end."
report also highlighted the volume of standing student
property and sites sold for development in the UK
as an indicator of a thriving market. Currently, the
combined value of such sites totals around £5
student numbers also help to buoy the market, attracting
investors through growth in demand. A few years ago,
the well-publicised tuition fee increase led to concerns
that student numbers would be permanently dented.
However, student numbers are now definitely on the
up. UCAS application for 2013/2014 were up 3.6%, and
early returns of 2014/2015 applications have increased
by 3.4% compared to this time last year. By March
2017, Russell Group universities plan to spend £9
billion on construction projects, including accommodation
for students alongside other new facilities.
the report suggests that the UK's student
property investment market presents developers
with a "significant opportunity." Across
the country, there is the potential for an extra 290,000
beds targeting student tenants. The report analysed
stock of student housing throughout the country, and
found that much of the current stock is inadequate.
In the cities of Edinburgh, Liverpool,
and Bristol, more than half of student beds are in
out-of-date, poor-quality halls of residence. Two
thirds of these are managed by the universities themselves,
and frequently lack adequate security, maintenance
particular, Pinnacle MC Global Network points to the
potential for construction of purpose-built student
accommodation complexes to replace the more traditional
option of houses in multiple occupation (HMOs). This,
Pinnacle believes, could release 66,000 properties
into the general housing stock of England and Wales
to help ease the current housing crisis.
to Pinnacle MC Global Network's director, Julie Harvey:
" We calculate the majority of lower quality
blocks are in good locations and so could be renovated
to a higher standard. However, 16% of all beds are
in lower quality blocks in poor locations... For operators
looking to expand, the opportunity to take market
share from these lower quality and poorly located
blocks will be attractive."