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January 22 2019

UK’s student property sector to hit £53 billion value in 2019

January 22 2019

UK’s student property sector to hit £53 billion value in 2019

Author: spgCategory: UK Student Property
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The country’s purpose-built student accommodation market continues to see a sustained demand from investors across the world, with 2019 forecast to be another huge year for investment.

Summary:

  • Knight Frank forecasts the UK’s purpose-built student accommodation sector to reach a total value of £53 billion (USD 68.2 billion) by the end of 2019
  • Large institutional investments from Singapore and the Far East dominated the market in 2018, with both private and commercial interest from key global territories likely to increase further over the next 12 months
  • Student property has proven itself to be a secure asset that delivers growth even during times of economic uncertainty

 

Student property in the UK is continuing to prove its long-term resilience and investment strength.

Knight Frank reports that a number of large institutional investment deals last year significantly increased the value of the purpose-built student property accommodation (PBSA) sector – and further investment over the next 12 months is expected to push this valuation further.

By the end of 2019, it’s estimated that the sector will be worth £53.2 billion (USD 68.2 billion). This represents a 72% rise in value since 2014.

Pointing to PBSA’s popularity among large institutional investors in 2018, in particular one deal made by a Singaporean holdings company totalling £180 million (USD 231 million), Knight Frank states that this underlines the global confidence in the sector. This year, interest is likely to remain high from investors across Southeast Asia, the Middle East and North America.

Why? UK student numbers are growing; a British education continues to maintain the same desirability among international students and employers its held for generations. However, supply of accommodation cannot keep up with the increased demand for modern PBSA properties from this expanding, and increasingly international, student population.

And this makes UK PBSA one of the country’s strongest and most compelling investments, even during times of wider economic uncertainty.

“Despite Brexit, global investors continue to acquire PBSA assets in the UK, fundamentally underpinned by the UK’s world renowned higher education system,” commented James Pullan, Global Head of Student Property at Knight Frank.

“The asset class offers a stable income stream, with strong year-on-year rental growth prospects. When compared to more mature asset classes, such as the offices sector, PBSA is standing out and that looks set to continue into the new year.”

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