2015: The year of student property investment?

2015: The year of student property investment?

Around £6 billion will be spent on student property investment before the end of 2015.

Summary:

  • Student property investment will surpass all previous totals this year
  • Both the maturity of the market and the diversity of investor is more pronounced than ever before
  • Given the sought-after nature of student property investment, Property Week will be holding a dedicated conference in December

It has been a few years since Knight Frank declared purpose-built student accommodation (PBSA) to be the UK’s strongest performing asset class, but 2015 appears to be the year in which it has become an investment portfolio must-have.

Prior to this year, student property was viewed as an alternative investment class, but the volumes spent in 2015 cannot be ignored by investors who have yet to secure assets.

Various independent property consultants have highlighted PBSA investment will surpass all previous annual totals and reach around £6 billion.

With the asset class more diverse and mature than ever before, international investors from the likes of the Middle East, South East Asia, Europe and North American and European are entering the market, in search of yields that can be around 50% higher than standard residential stock.

The scale of investors also crosses the full spectrum, with individual purchasers now being joined by banks, private equity and institutional investors.

Given the rising prominence of the asset, law firm Addleshaw Goddard is producing a new research document entitled ‘Education Nation: the graduation of student housing’. The report on the state of play in the sector will be launched at Property Week’s Student Accommodation conference, which is held on December 3rd.

The conference will be examining the impact international students have on the market and highlight opportunities that investors will have in the future. Interestingly, student property’s influence on some of the newly emergent investment opportunities, such as the PRS, will also be discussed.

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