CBRE: Q1 student property investment almost £4bn

CBRE: Q1 student property investment almost £4bn

Investors continue to view UK student property as a must-have asset, with CBRE finding nearly £4 billion was spent in the first half of 2015.

Summary:

  • CBRE finds investors have spent almost £4 billion on student property in the first six months of 2015
  • Investors favour student property for its higher yields, full management and lower price entry points
  • With student demand for accommodation set to increase, how long will you wait before adding the asset to your portfolio?

Student property investment is fast becoming the go-to asset for many.

It has always been popular with overseas investors looking for fully managed UK real estate, but it is now appealing to many experts from the domestic buy-to-let market as well.

Investors favour student property as it generates higher yields than conventional residential stock.

The latest figures from CBRE show that in the first half of 2015, investors have spent £3.98 billion on student accommodation, far surpassing the total of £2.35 billion recorded in the whole of last year.

CBRE highlighted that the returns associated with student housing are likely to continue as supply remains constrained across the UK. A growing number of both international and domestic students are enrolling at British universities and this high demand is pushing rents higher across much of the country, with students happy to pay premiums for purpose-built accommodation.

Jo Winchester, Head of Student Housing Advisory at CBRE, said: “So long as demand outstrips supply, upward pressure on both rents and capital values will continue to make the market an attractive proposition for investors, and we don’t expect the market to come off the boil for some time.”

Ms Winchester also pointed out lower capital values per square foot associated with student accommodation offer a more cost-effective way to diversify into the private rented sector, as well as generating higher yields.

These latest figures come after research from fellow property consultancy Savills revealed a total of £4.2 billion had been spent on student property so far this year.

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