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Gemma Stephenson

Student property investment moves into the mainstream

The student property market has been growing as a popular asset class for a few years now, with investors starting to see the benefits of putting their money into a high-yield asset that has the real positive of retaining demand year after year.

And now the latest report published by the CBRE into the student property sector has revealed that this year has been the best on record. While the last two years saw student investment top £2 billion for the first time and then exceed this, 2014 has already surpassed what we’ve seen in two record-breaking years.

In the year to date, the investment in the student market has hit £2.369 billion, a figure which should increase further still with December still to be counted. CBRE predicts that this is a figure that will grow again in 2015 as conditions for the sector continue to improve.

For student property investors, the biggest factor affecting their income is demand. As long as student numbers are high, the tenants will be there. There were worries that the rising tuition fees in the last few years would derail this, but the Student Housing Market View has debunked this.

It said in 2014/15, the number of undergraduate students entering the education system, according to UCAS, was the highest on record, showing that demand will continue to exist in the student property market for some time to come at least.

However, the biggest finding was that investment in this sector has completely changed as it has been accepted as a safe and mainstream asset class. Whereas in the past the majority of people investing in student properties have been private investors, more institutions are now putting their money into it.

Previously, these types of investors have focused on assets like long leased product or indirect investment, but now they are increasingly moving towards student property, which has massively changed the face of this sector since 2012.

So with student property as one of the best asset classes at the moment – with average yields remaining at around six per cent – what does the future hold for the market as it moves into the mainstream?

About Gemma Stephenson

Since graduating in 2008, Gemma has written for a wide selection of publications and is a regular online blogger.

From property news to investment insights, Gemma has a passion for delivering topical property investment news and has contributed to many online guides and investment websites.

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