The volume of investment in the UK's student accommodation sector has reached its highest ever level, new research from CBRE shows. According to the firm, GBP 2 billion has been ploughed into the student housing market in the first three quarters of 2012, a 145 per cent increase in the amount of money to enter the sector in the same period in 2011. Jo Winchester, head of student advisory at the organisation, explained strong returns are driving investors towards developments designed for those at university.
"Our data shows that student accommodation is outperforming other asset classes by some margin, as it has brought 9.6 per cent returns in the year to September 2012. This compares to 5.4 per cent for all offices and 2.2 per cent for retail in the year to August 2012," she asserted. CBRE also pointed out that there have been several transactions this year worth more than GBP 100 million, making this the first time such high-value deals have been concluded in the sector. The firm went on to highlight a growing trend among investors who are seeking property investment opportunities outside of London. According to its findings, more than half of the funds ploughed into student accommodation so far this year have been for assets outside the capital city.
Last month, sales director at Knight Knox International Martin Copeland stressed there is still strong demand for UK student property among investors. He added that the students themselves also expect a higher standard of accommodation when they go to university, commenting that these youngsters are "definitely more commercially aware than ever before". This, therefore, increases the need for high-quality, bespoke student housing developments. In a report about the state of the sector, the firm was quick to point out that, even though the number of people entering higher education fell in the UK this year in response to a hike in tuition fees, student accommodation is still in demand. This is because the sector has historically been undersupplied and there is still room for expansion.
- Friday 26 October 2012