The private student accommodation sector is set to continue as the investment of choice for savvy property investors according to a recently released report by CB Richard Ellis (CBRE). Total capital investment in the sector more than doubled in 2012, to more than £2.7billion.
The UK property market has seen the creation of a number of so called ‘alternative’ investments since the market crashed, as increasingly, investors have searched for different avenues to recoup their capital in replacement of the traditional bricks and mortar. Bamboo, oil, diamonds and even parking spaces have all been lucrative investments for traders, but none has been as stable or as popular as the private student accommodation sector.
During the past couple of years, the Higher Education sector has become increasingly globalised, with students from around the world competing for places at UK universities. The desire for a British education, coupled with an increase in UK tuition fees, has forced a rise in the quality of accommodation available to students. With institutions increasingly unable to provide the higher standard required, specialist
providers such as the Mistoria Group have entered the market in their place.
Whilst the rise in popularity for UK degrees has not abated, the introduction of higher tuition fees in 2011 saw a drop in applications, causing concern that the bubble would burst and there would be an oversupply in some areas, leaving empty properties that could not be filled.
This however, has not been the case, allowing investors to enter the sector and gain higher returns on their investment.
Renowned property market analyst CBRE explains: “Student housing is outperforming other asset classes ….. and has delivered 9.6 per cent total returns in 2012. This compares to 4.4 per cent for all offices and 2.2 per cent for all retail over the same period”.