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Developer and investor opportunity as UK student demand surges
The UK’s student accommodation market is surging despite the gloomy economic outlook, according to a new report from CB Richard Ellis.
Investors have committed around £347,675,000 to the sector this year alone as they are attracted by yields of between 5.25% and 7% per year, according to the report.
And with demand in some areas reaching one bed space for every nine students, alongside student numbers increasing 4% last year, experts are saying private developers and investors could grab the opportunity to plug the gap.
Jennet Siebrits, head of residential research at CB Richard Ellis, told OPP: "Accommodation will play an even more important role in a university's overall offer as students' expectations increase with their budgets which will see students demand high quality accommodation, a good service led approach from operators and ideally, all inclusive rent.”
“Private developers will be relied upon to plug this gap, given that the universities will have very little capital to do so themselves. This should encourage more opportunities for developers to work closely with the institutions going forward, which will also prove helpful in the planning process."
Alan Forsyth, director of property investment agency Property Secrets, added: "Students have realised the appeals of modern, purpose built accommodation available from the private sector and this in turn is pushing up demand. Consequently, buy to let investors will continue to look towards the private student housing market as a way of ensuring guaranteed returns as well as a diversification of their real estate portfolios.”
OPP reported last month that property fund manager Cordea Savills sold £27.75million-worth of student accommodation in Edinburgh, while high demand in Liverpool has led investment agency Property Frontiers to proclaim that the city heralds a "great opportunity" for developers and investors.
