Global investment into purpose-built student accommodation (PBSA) reached a record $16.3 billion in 2018, surpassing the previous high of $15.9 billion invested in 2017, according to new research from Knight Frank.

Further research from Real Capital Analytics (RCA) also revealed cross-border investment in student accommodation accounted for approximately 40% of total investment over the last three years.

With a record amount of capital distributed into student assets worldwide, the UK has become the second largest market for PBSA outside North America. Rapid growth over the last decade has pushed the sector’s value up to more than $65 billion (£50 billion).

Knight Frank said the key to this growth has been a strong global investor appetite for assets, the ‘haven appeal’ of the stablished UK market and rising demand from domestic and international students.

What’s more, the globalisation in the market extends to the make-up of the student body, with non-UK domiciled students representing 16% of full-time undergraduate students and 19% of higher education students overall.

Data from UCAS also showed a 6% year-on-year increase in the number of applications from international students for the 2019/20 academic year.

While current demographic trends mean the number of 18-year-olds in the UK is failing, domestic demand is expected to rise long-term. Knight Frank’s analysis of ONS population projections points to a 15% increase in full-time undergraduate numbers between now and 2030 – representing an increase of 220,000 to over 1.7 million.

James Pullan, global head of student property at Knight Frank, said: “Higher education and globalisation are closely linked. The knowledge capital produced by universities is key in underpinning the global economy, whilst the role universities play in driving technological development has transformed the way economies are organised.”

“Economic growth globally is expected to moderate over the coming years. This change will require a response from property investors. We expect further growth in investment volumes within the student property market as investors focus on specialist sectors to secure outperformance.”