Appetite for student accommodation continues to grow both in the UK and across Europe
As a leader in UK purpose-built student accommodation (PBSA), QIP & it’s principals hold extensive knowledge of the sector and have delivered consistent, attractive double digit returns.
Student accommodation is second in transaction volumes amongst alternative investments in the UK, and total UK PBSA transactions amounted to GBP 5.77b in 2020 alone. The sector total is now worth around 60 billion, with UCAS application data from 2021 showing an 8.4% annual increase in university applications.
Despite muted activity in the second quarter of 2021, confidence towards UK student accommodation has been gradually improving. A rising demand indicates rising occupancy in PBSA, with this sector anticipated to result in rental growth in top locations. A combination of a record number of UCAS applications, increased demand for specialised courses, more applicants for higher education and changes to visa systems enhancing opportunities in the UK after graduation have all resulted in a demand for student accommodation pick up.
Although concerns remain regarding international travel, the impact this has on international students remains minimal, with the UK being a top location for pursuing university education and travel restrictions in the UK beginning to ease.
Enquiries and forward bookings for PBSA have picked up, with Future Generation reporting that the volume of bookings significantly increased after the government announcement of a roadmap out of lockdown. Occupancy levels for the academic year 2021/22 have exceeded 90% on average.
As confidence returns to the market, the pent-up demand for stable long-income streams from real estate investors should translate into an increase in allocation to the UK student accommodation sector. The polarization in the sector towards prime regional locations continues to shape the market, resulting in more looking toward secondary and tertiary regional cities growing.