Student Housing investment to top £5bn
The student housing sector continues to grow into a major international industry, with investment in the sector predicted to pass the £5 billion barrier in 2015.
Students now expect more from their accommodation, as recently highlighted in the “Homes fit for study’ research conducted by the National Union of Students. The report clearly defined that increasingly students are looking for their accommodation to provide them an environment that is a good place to study, as opposed to somewhere simply to lay their head.
It is not just in quality and purpose-built housing, though, that the student property sector has transformed. The investment market for student accommodation has also matured. It has grown from its roots in the Business Expansion Scheme of the late 1980s to the listing of Student REITs on the London Stock Exchange.
In 2014, investment in the purpose-built student accommodation market totaled £2.45 billion, 23 per cent above 2013 levels. This figure has already been surpassed in the first five months of 2015, with £4.2 billion invested (on both a standing investment and site acquisition basis). This is already 70 per cent above the level recorded at this time last year and 40 per cent above the previous peak in 2012.
“The purpose-built student accommodation sector looks set to continue its strong growth,” says Savills.
“Student numbers are recovering and are set to increase further with the removal of the cap. With increased numbers, there is the need for more supply.”
Savills now forecasts a total investment of £5.5 billion in the sector this year.