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Student property investment reaches record high

More than 4,500 purpose-built student accommodation units were constructed in 2015, according to figures from Barbour ABI. Overall, the value of construction projects in this sector surpassed £2.3 billion. 

As a result, investment in purpose-built student accommodation is now at a five year high. 

The 4,500-plus new purpose-built units was a 26% year-on-year uplift in comparison to 2014. In addition, it was the highest number of new units built since the global financial crisis hit in 2007-8. 

Investor demand doesn't look like slowing up, either - in the final quarter of 2015 there were 2,117 purpose-built units commissioned. 

With more students attending British universities and demanding high-quality accommodation, investor appetite for this type of accommodation is expected to remain high in 2016.    

“The removal of the cap on student numbers may have also triggered many universities to anticipate an increase in enrolment over the coming years, hence the jump in the number of new student bedrooms being commissioned in 2015,” Michael Dall, Lead Economist at Barbour ABI, said.  

“As investor appetite remains high for student housing, I expect it will be at the forefront for many contractors over the coming years.”

All in all, more than £6 billion was invested in the purpose-built student accommodation sector last year, further cementing its position as the country's number one asset class.  

  • "Higher education is a tangible asset for future generations and, as international mobility increases, demand for quality institutions is growing. According to the OECD, by 2025, there will be 8 million people studying abroad. In Europe, there is a market for student accommodation — particularly in the UK and Germany.", says one of the recent reports from

    "The UK student property market is developed and in strong demand, thanks to the country’s history of academic excellence, world-renowned institutions as well as growing local and international demand for British university courses.

    The UK student property market attracted $6.5 billion in 2015, compared to only $3 billion in the US, which has far more students, according to a Savills report on worldwide investment trends.

    In the UK, student property is particularly popular with foreign investors from the US, Russia and the Middle East. American investments made up 80% of cross-border deals into this segment between September 2014 and 2015 accord to Savills. At the same time, LetterOne Treasury Services, a foundation led by Russian oligarch Mikhail Fridman, invested $770 million into the Pure Student Living student housing management company in 2015."

    (Full report by Ivan Chepizhko, Tranio, drawing interesting comparisons between the UK and German student accommodation markets can be found here,germany/analytics/high_yields_and_growing_demand_for_student_property_in_the_uk_and_germany/)

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