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Student accommodation

Will student property remain king in 2016?

Author: Gemma

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Experience Invest kicked off 2015 with the successful launch of Phase One of London Spring Place.

The student property investment received a positive reception from investors and, within just a few months, the development was sold out.

“The team at Experience Invest have been really surprised by the amount of interest we have received in the Luton development,” a spokesperson previously commented. “It’s proving our hottest ticket at the moment, with investors all over the world showing a keen interest.”

Fast forward a year and the Experience Invest team has launched a new phase of the popular student property investment, Opto House.

The evergreen nature of the sector has appealed to investors who have secured an assured 5-year rental return from a fully managed asset.

Investment in the sector

Last year the UK’s student property sector was injected with a record-breaking £5.7 billion worth of investment.

Investment in the sector is set to remain strong throughout 2016 however, a new report from CBRE shows that investment may slow slightly.

Property experts remain positive about the sector despite the dip, suggesting that it is unlikely that levels could reach the astronomical highs of 2015.

Rising student numbers

January deadline figures from UCAS show that 593,720 applications were submitted by people who wish to study in a UK university. This figure represents a 1,500 year-on-year rise.

Most notably, the number of overseas students – the main target market for purpose-build student property – increased at a faster rate than applications from UK-based students.

Continuing the upward trend, international applications increased by around 500 in 2016 and EU student applicants increased by 3,000 (6% rise).

Will student property still be king in 2016?

It would seem that rising student numbers and a continued lack of high-quality student property will drive the market in 2016.

While investment in the student property sector may decline, rising student numbers will no doubt add to investor confidence.

What’s more, the latest report from CBRE has shown that average rental prices in the student market increased by 1.94% in 2015. Investors also received an average return of 18.4% in 2015 – when taking yield shift, rising prices and a generally positive outlook of the market into account.

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