Property Partner, the world’s first property stock exchange, recently saw individual investors raising £2,992,800 of equity to buy a Purpose-Built Student Accommodation (PBSA) block in central Newcastle.
Located on Pitt Street, the block boasts 65 luxury studios over a five-storey development, making it ideal for students of both Newcastle University and Northumbria University. The block is right next to Newcastle Business School, a 14-minute stroll from the main campus, and within close range of the rail station and local shopping hub Eldon Square.
This recent purchase is the UK’s largest ever property crowdfund, and signifies the popularity of PBSA within the property sector, as it has delivered higher average annual total returns (11.8%) than residential (7.8%) and commercial (7.4%) property in the past five years.
After all costs and fees, the dividend yield on the property stands at 6.13%, with strong total returns predicted over the next five years, when returns from rental income and capital appreciation are factored in over that time span.
Daniel Gandesha, chief executive and founder of Property Partner, described the crowdfund as a proud moment and a ‘pivotal moment in the property investment space’.
He said: “It is no surprise that Purpose-Built Student Accommodation is what has driven this interest given its strong performance in recent years, and being an asset class that traditional landlords have long been locked out of."
However, it’s not just investors that will benefit. Run-down student digs are becoming much less the norm in a typical student’s university experience.
Gandesha continued: “Expectations are changing as more and more purpose-built blocks offer students modern and attractive accommodation at the heart of their university towns.”
Since launching on the platform in August 2017, the Newcastle development is the second PBSA asset to be offered as an investment from Property Partner. Its secondary market is allowing new investors to purchase shares at a later date.
“This news marks another step in our journey to build a property market that works for everyone,” Gandesha said.