Student property investment increases by 145 percent according to CBRE

Student property investment increases by 145 percent according to CBRE

The student property market is arguably the best performing market in the UK at the moment, especially with a surge in demand for high-quality residences so it’s not overly surprising that there has been an increased amount of investment in the sector.

The latest report from CBRE states that since the start of the year the amount invested into student property in the UK has increased to £2 billion, this means that the amount invested has risen by a whopping 145 percent in the past nine months.

This all corresponds with the earlier findings of CBRE who stated that in the first half of the year, investment into the student property market had almost doubled to £800 million from £375 million in the same period of 2011.

The value of certain transactions is also a notable aspect of the student accommodation sector with five deals worth over £100 million taking place over the past 15 months, before this time, no deal had exceeded £85 million which further demonstrates the sheer demand and interest in this evolving sector.

Rental returns are a key factor in the attractiveness of student property since yields tend to be a lot better than those in the residential buy-to-let market.

Jo Winchester, Head of Student Advisory, CBRE, said: “Total returns remains a key driver for investors, as they flock towards the impressive returns given by student accommodation for a second year in a row.

“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 all retail in the year to August 2012.” 

There has also been increased investment outside of the capital with more and more investors now choosing to invest outside of London with over half of investments so far this year taking place outside of London.

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