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The UK’s student accommodation market continues to increase- good news for investors
A report from CBRE revealed recently that £863 million was invested into student accommodation in 2011 ... a massive 120% rise on what was invested in 2009.
And according to Jennet Siebrits, head of residential research at CBRE, investors are becoming increasingly attracted to UK student property.
“Student accommodation is more attractive than many other asset classes in the current climate and we have seen increasing interest from relatively new parties seeking to diversify their portfolios,” Siebrits said.
Occupancy rates for student accommodation are at 99% and annual rents have increased by 5% in London and 4% nationwide, added the report.
Also this week property fund managers, LaSalle Investment Management, has announced a £23.1 million deal this week to acquire two prime UK student accommodation blocks in Newcastle City Centre at a net initial yield of 5.65% from Aviva Investors.
The first block, Camden Court, houses students from Northumbria University, and the second unit, Magnet Court, serves Newcastle University. Magnet Court is located 200 metres from Newcastle University’s new Business School, which is under construction on the former Scottish & Newcastle brewery site.
The 456 en-suite student bedrooms involved are let through the big UK student accommodation specialist, Unite, for 19.5 years with uncapped annual RPI rental uplifts.
Chris Fry, Fund Manager at LaSalle, told OPP that “this acquisition provides our client with an inflation-proof income stream derived from prime property in a city where students are always keen to study and live.”
Richard Walsh, Director of GVA’s National Markets Team who acted for LaSalle said: “This is a fantastic acquisition and is exactly what the investment market wants at the moment, strong indexed linked income for nearly 20 years in a sector which is set to see continued strong rental growth.”
