Student accommodation goes to the top of the class

In a time when the office market is still sluggish, one commercial property sector has sprinted through to pick up the mantel.

We’ve seen across the East Midlands the rush by developers to transform tired old office or commercial buildings into student accommodation, and now new figures from one of the largest property consultants in the market says that 2017 could be a record year for money invested in the sector.

Some £4.8 billion worth of student accommodation stock will be transacted by the end of the year according to research from Cushman & Wakefield.

The company says that, based on current projections, a number of large portfolios could change hands by the end of Q4 2017 taking transactions even beyond this level. In the first half of 2017, £2.41bn was transacted, a 24% increase on the equivalent period last year.

In a Mid-Year Snapshot of the UK student accommodation investment market, Cushman & Wakefield revealed there are currently 11,000 bed spaces being marketed to investors totalling £1.20bn. An additional £188m is also under offer.

The data also revealed that despite overall UK and EU applications for places at university being down for 2017/18 by 3.7%, non-EU applications rose by 2.2%.

Cushman & Wakefield says that the Purpose Built Student Accommodation (PBSA) market continues to be one of the most attractive asset classes in real estate for investors, and that due to the value of foreign currencies against the Pound, there has been an influx of capital from overseas buyers in 2017 who are now competing with UK purchasers. Recent deals have seen investors from the Middle East, Singapore, China and Russia plough money into bricks and mortar.

So, has the student accommodation market reached tipping point? Time will tell, but 2017 looks like it will set a new high watermark for the sector.

If you need advice on Commercial Property contact Rothera Sharp’s Commercial Property team on 0800 0886280 or email enquiries@rotherasharp.co.uk

Tom Redgate - Rothera Sharp Solicitors Nottingham