Student accommodation forecast to be a top asset class in 2017.
With a record number of students placed for higher education in the 2016/2017 academic year, investors are jumping at the chance to invest in UK student property.
In recent years, property investors have been searching for alternative investment markets, leading to a significant increase in the popularity of commercial assets such as student accommodation. Now, with approximately 493,000 students placed for the 2016/17 academic year according to UCAS, demand is skyrocketing; making this market as attractive to investors as it has ever been.
In addition to increasing student numbers, OPP.Today recently forecast that the student accommodation market will be less susceptible to fallout from the UK’s vote to leave the European Union. The sector’s strength is rooted in the UK’s world-wide reputation for academic excellence, combined with recent assurances from The Student Loans Company that EU students attending UK universities this autumn would have their student loans honoured irrespective of the Brexit vote.
While the long-term implications for EU students studying in the UK remains somewhat unclear, the UK’s student population originate from much farther than just Europe. In fact, in 2015 the UK saw more students from China than from all EU countries combined. These students will remain unaffected by the referendum result, and will continue to contribute significantly to the growing demand for high quality accommodation. With this increased demand comes an increased interest amongst savvy investors.
This year, student accommodation investment platform StudentProperty.investments identified a significant rise in enquiries into student property investment opportunities.
Director Dan Johnson said “In H1 2016, we have seen a substantial 11% rise in overall enquiries for UK student property investments compared to the total number of enquiries received in 2015. Demand for student properties is not just from UK buyers but from all over the world as international investors seek to take advantage of a weak pound and higher than average residential buy-to-let returns.”
The importance of the weakened pound should not be understated. With exchange rates following the Brexit announcement much more favourable for buyers dealing in Dollars, Euros of Dirham, these buyers could stand to save thousands on UK investment property. A recent report from REM Online identified that UK student property market already receives 10 times the level of investment seen in Germany, with over £5billion of invested in 2015. With more students applying for higher education each year, interest in this market will continue increasing as more and more investors take advantage of this lucrative asset class.
The Dye Works, Bradford
Our latest student accommodation investment, the Dye Works, is an outstanding 165 bed development in the heart of Bradford. The project provides a safe and secure living space for students, with 24 hour security and plenty of communal spaces for students to work and study. A terrific investment opportunity, investors will receive assured returns of 8% NET for 3 years, with growing demand expected to maintain high returns well after the 3 year assurance period.
The Dye Works development will accommodate Bradford’s growing student population. With over 36,000 students attending higher education in the area, high levels of occupancy are forecast for well into the development’s future.
For more information on Select Portfolio’s range of student accommodation investment opportunities contact a member of our team on +44 (0)1202 765011 or email [email protected]