Why serious investors love student property

When large institutional investors invest in an asset you know that it must be a pretty safe bet and that’s why student property stands out as such an attractive opportunity. Over the last 12 months, billions of pounds have been invested in the PBSA (purpose-built student accommodation) sector and these investments have been made by huge Canadian pensions funds and even Russian oligarchs.

 

The quality of UK universities, the number of homegrown and overseas students they attract and the expectations of these students have all contributed to why PBSA is now seen as a prime investment opportunity in the UK.

 

In an interesting survey last year by FTSE 250 company Unite Group, a number of undergraduates were polled about their opinion regarding student property and 87% said they wanted peace and quiet where they lived! In other words, they want accommodation that is conducive to academic study and this ultimately means not sharing. This is where PBSA really delivers compared to your traditional HMO with shared occupancy.

 

It is no coincidence that the big rise in student fees as contributed to the mindset of the modern student. When you are paying around £9K a year to study, you become more than a student, you become a consumer. This means you want value for money and you are likely to be more discerning about your living accommodation and the studying environment it represents.

 

Developers of PBSA have switched on to this concept and they are building developments that give students the quality of accommodation they need, the privacy they crave and the lifestyle they aspire to. This doesn’t mean that these developments avoid all aspects of social interaction. Far from it, special communal areas form a feature of most of these developments, giving the students the opportunity to socialise and collaborate should they want to.

 

From an investors perspective there is still a big imbalance between the number of students and the amount of student property available and therein lies the opportunity. With student numbers on the increase, when luxury PBSA properties are built, students are chomping at the bit to get in. So, for the investor, there is a long line of willing and available tenants ready to pay their rents.

 

So, in summary, there is the demand by students for high quality accommodation, student numbers are increasing and there is a lack of supply to house them. It is little wonder that huge institutional investors are getting in on the act and taking advantage of this perfect storm. The good news is that PBSA investment is open to everybody so if you’re looking for a sure fire-way to maximise your return on investment, student property could be exactly what you’re looking for.

 

Have we sparked your interest? Contact us now on 0333 3001 888 to find out more.

 

12 July 2016
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