Corporates sink more nearly £1.5 billion in to student housing

AFS Team·31 May 2012·3 min read
Corporates sink more nearly £1.5 billion in to student housing
Worries about the economy and rising tuition fees were shrugged off by corporate student housing investors who increased their stakes in the sector by 50% to £1.15 billion last year. Encouraged by rents and yields outperforming other property investments, the money men are still sinking their cash in to student homes as another £250 million has been invested already in 2012, according to property consultants CBRE. Many student landlords were concerned that rising tuition fees for the next academic year, starting in September, would push down the number of applications for university places. Although applications are down, learning institutions still have fewer degree places than the number of would-be students clamouring for places - while any shortfall is soon filled by a growing number of students from overseas. The latest UCAS figures reveal applications from outside Europe grew by 12% year on year. The most came from Hong Kong (37%) and Australia (15%). Jo Winchester, Head of Student Housing, CBRE, said: “Applications are currently 80,000 ahead of the number of acceptances in 2011. While we do not expect student numbers to fall nationally due to fee increases, we do anticipate wide variations at a local level. However, it is still too early to identify which universities will have reduced cohorts in 2012 and how demand for accommodation will be affected in those towns. “Looking ahead, developers will need to not only consider student numbers and bed-spaces, but most critically the financial strength and popularity of universities in conjunction with the underlying dynamics of the property market. Support from universities together with clever structuring is likely to assist planning and funding solutions for new development. “The recent figures have shown investors that now is a good time to buy student properties as property yields look very positive.”