New research shows that £2 billion has been invested in UK student accommodation in the first 9 months of 2013. This is a record figure and is an increase of 145% on the amount invested in the same period last year. The research comes from CBRE the global real estate services firm.
CBRE have found that as well as rising investment there are a number of changing trends in the sector. Investors are now deploying more capital outside of London than within it. More than half the total investment in 2012 to date has been outside London. Some landlord insurance clients are part of this growing market for providing accommodation for students.
The sector is also seeing larger deals than ever before according to the CBRE figures. During the past 15 months the market has seen five transactions of greater than £100 million. Before the third quarter of 2011, no single deal had exceeded £85 million. In one deal in 2012 a pension fund manager invested £840 million. It sounds as though the image students living in poor quality flats in badly converted houses is changing fast.
CBRE reckon that investors are benefitting from impressive returns from the student market. The have calculated that it is outperforming other asset classes such as office and retail lettings. Interestingly, the research also points to a decline in student numbers so it remains to be seen whether this sector will continue to grow so successfully. Landlords thinking about this sector could take a look at www.cbre.com