The student property sector is heading for further growth in 2015 following a record-breaking and market changing year for student accommodation.
After exceeding last year’s record investment total last month, it’s safe to say that 2014 has been a bumper year for student property investors. Transactions in the UK’s student housing market totalled £2.37bn between January and November this year, according to CBRE figures, continuing the strong growth that student property has seen over the past two decades.
Due to the volume of this year’s investment in the student housing sector, it is already the biggest ever annual total for the asset class. However, this is not the main focus for experts in the sector. The big news is where the money is coming from and how this is changing.
With high profile investments taking place throughout the year, such as La Salle’s £33.5 million purchase of King Square Studios, the rise in the number of students in the UK has caught the attention of institutional investors. This year, an enormous 500,000 students entered the system and this is helping to attract a wide range of investors.
There is now a wide range of buyers in the market, for developments of all sizes, with demand for student properties showing no sign of waning. A recent report published by JLL predicts that investment in real estate alternatives such as student housing will almost double by 2019.
As the student property sector continues to expand, there is no better time to invest in UK student accommodation.
With only the final units remaining, The Grand Mill is a fully tenanted and operational student development, offering investors immediate income. Located just 0.4 miles from the University of Bradford and Bradford College, en-suite pods are available from just £39,000 and investors can benefit from up to 8% NET rental return.
For a higher yield, Holmes Street Burnley offers investors 10% NET rental return, contractually guaranteed for 5 years and interest on deposit. Due for completion in Q3 2015, the development is located just 250m from the University College of Football Business and will be the first purpose built student accommodation in the university town.