The latest UK Student Housing report from Savills shows that the student property sector continues to be attractive to investors and it has a witnessed a flurry of activity over the past 2 years.
Underpinned by demand from rising student numbers and increasing international student mobility, many investors are looking for new opportunities to secure returns from high specification, purpose-built accommodation.
Investment in this sector has increased despite the economic downturn. According to Savills, £5 billion worth of standing stock and development sites were sold in 2012 and 2013, with signs showing that high levels of investment will continue throughout 2014.
Increasing student mobility
According to the Patterns and Trends in UK Higher Education 2013 report, there are currently 2.5 million students studying in the UK and this number is expected to rise to 3.85 million by 2024 (The British Council).
In 1996-1997 there were just 1.8 million students in the UK. This dramatic expansion of the UK’s student population has left most universities unable to accommodate rising student numbers, with current accommodation often outdated and unable to home a high percentage of new students due to lack of available beds.
There has been an upward trend in the number of international and EU students studying in the UK and, with no cap on the number of students who can study in the UK, Knight Frank forecasts that the number of international students in Higher Education will increase by 15%-20% over the next 5 years.
In 2003–04 non-EU students made up 8.6% of all students; by 2011–12 this had risen to 12.1%. In the same time frame, the number EU students increased from 4.2% to 5.3%.
International students are the main target market for purpose-built accommodation and the UK currently attracts 1 in 9 students seeking to study overseas. The construction of modern student developments is imperative for UK universities to continue to attract high levels of overseas students and to maintain their global competitiveness.
A good location for investors
The University of Bedfordshire is home to over 24,000 students from over 100 countries.
With a number of awards under its belt, the University opened a brand new £34m Campus Centre in 2010 and offers state-of-the-art facilities including £6m Campus Centre housing dance studios and a 280-seat theatre, £8m PE and Sport Science Centre and £1.2m Business Pods, unique in the UK, with work and chill-out areas, and meeting rooms.
Due to the popularity of the University, rising student numbers have created a shortfall of student rooms in the surrounding area.
An independent feasibility report by CRM, the UK’s largest independent student property management company, has shown that there are only 2,275 available purpose-built beds for 24,000 University of Bedfordshire students.
And with almost five applicants competing for each available place, demand for student rooms is expected to continue to rise.
New purpose-built university housing development launched
Located just 0.2 miles from the University of Bedfordshire, Chapel Street is a brand new, high specification, purpose-built student housing development.
The development comprises 61 luxury en-suite rooms and 26 self-contained studio suites which will be fully managed and delivered fully furnished and finished to a high standard.
To answer to the demand for modern accommodation for students, Chapel Street will feature a wealth of facilities including communal gardens, a fully equipped gym, high-speed internet, lounge area with LCD TVs, shared working areas, pool tables, video game and internet stations, onsite laundry, 24 hour CCTV, a manned reception and visitor parking.
Exclusive to Experience Invest, Chapel Street will provide investors with 9% NET per annum which will be assured for the first 5 years of the investment.
With a favourable payment plan spread across the duration of the construction phase, en-suite rooms are available for £56,700 and studio suites are available for £67,300.