Recent analysis by real estate and investment management experts has demonstrated why the student accommodation market has become an increasingly attractive investment opportunity for those looking to expand and develop their commercial property portfolio.
Commercial property specialists have produced findings that show £1.9 billion has been invested in student housing in the year to July, with this type of investment predicted to account for £1 out of every £10 invested in commercial property in the UK this year.
These figures show a substantial increase on the £1.7 billion invested in this sector over the same period in 2016, with an estimated £3 billion of investment stock pending in the market and expected to be completed by the end of 2017. It is anticipated that total investment will reach £5.4 billion by the end of this year, representing an increase of £2.2 billion on the total investment in student housing that took place in 2016. As a result, student housing has made up 34.7% of alternative investment volumes in 2017. It is anticipated that this growth will continue over the coming years, as analysts predict that a further £5 billion of investment in university student housing partnerships is required to meet demand.
Student accommodation is seen as an attractive investment opportunity as the number of students attending universities in the UK remains high – around 500,000 places being taken up on university courses in 2017/18 according to UCAS. Despite these numbers, the supply of purpose-built student accommodation still lags behind the number of students taking up university places, with the demand for this type of housing continuing to outstrip supply.
It is also noted that purpose-built student accommodation is attractive to investors due to the high yields offered, and because many students will pay in advance for the entire year or term. University towns experience a constant demand for quality rental properties, with substantial growth in the student housing market being recorded in major cities such as London and Bristol, but also in smaller regional towns with developing student populations. Furthermore, as rents have continued to rise, investors have been afforded inflation protection, making investment in student accommodation even more attractive.
Wilford Smith provides high-quality, expert property advice to ensure that, whatever the nature of your business, your commercial conveyancing transaction will be concluded as quickly and seamlessly as possible. From dealing with lenders to investigating land ownership, the process of buying, selling or leasing commercial property presents a unique set of challenges for business owners. Our experienced commercial conveyancing lawyers are experts at preparing contracts, negotiating the purchase and sale of commercial property and reaching binding agreements on our clients’ behalf. Contact our team today on 0808 169 5677 to find out how we can help.