Student Property Investment Doubled in 2012 - Tripled Since 2009

According to the latest figures from CBRE some £2.7 billion was invested in student property last year, an astonishing 125% increase compared to 2011...

According to the latest figures from CBRE some £2.7 billion was invested in student property last year, an astonishing 125% increase compared to 2011. This is on top of last year's 53% growth and 124% growth the year before, meaning that student property investment has tripled since 2009.

The 2012 growth might be surprising given that UCAS figures show a 6.6% decrease in higher education applicants for the 2012 academic year, with just 653,600 students applying for spaces, however we know that this gap was more than made up for by growth in cross-border applications.

"Although the number of student applications and acceptances fell in 2012, capital committed to the sector has grown dramatically over the last 12 months," said Jo Winchester, head of student advisory at CBRE.

"The marker is increasingly dominated by specialist student funds and developers, who are deploying large amounts of capital in the regions as well as within London, making student accommodation a healthy sector nationally.

"As an investment, student accommodation is relatively low risk and provides a secure income. Occupancy levels remain high, especially when compared to the vacancy rates in some mainstream sectors, and most university towns remain undersupplied."

The report contains one other fact that may surprise many, and that is the fact that - like last year - investments in regions outside London again outpaced that of the capital, with cities such as Manchester, Liverpool, Glasgow and Bradford all featuring heavy UK wide investor demand. Dutch Pension Fund Managers PGGM were responsible for the biggest transaction in 2012, buying 60pc of the University Assets Programme for an estimated £840 million.

According to CBRE, student housing is strongly outperforming other property asset classes. Last year, it delivered total returns of 9.6pc for investors, compared with 4.4pc for all office properties and 2.2pc for all retail.

- Monday 21 January 2013

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