Post-Covid student accommodation 'is a winner'
The UK's post-Covid student accommodation market is becoming increasingly attractive to private equity firms, a Bloomberg report reveals.
They are pumping hundreds of millions of pounds into the sector because they believe they will enjoy high rental returns.
Bloomberg highlights that of the deals for student property this year, more than one-third of them have been financed by private equity firms.
Between 2016 and 2019, that figure was just 15%.
Student application numbers will rise this year
They also highlight that student application numbers will rise by 8.5% this year, and that purpose-built student accommodation will be oversubscribed.
The report also reveals that US-based private equity firms are beginning to take a keen interest in student accommodation deals in the UK.
The report writers say that many students have had to pay their full rent while living in lockdown when they are living away from their university residences.
Private equity student landlords
The report also quotes data from real estate firm Jones Lang LaSalle which found that the top 10 of the largest private equity student landlords currently own around 8% of all student beds.
However, prospects for student accommodation investment look good with the sector needing another 310,000 beds to meet the needs of all first-year and international university students.
The managing director of Accommodation for Students, Simon Thompson, said: "It has been clear for some time now that overseas-based investors are increasingly looking to invest in UK student accommodation.
"The student market is set to grow and there's still room for smaller investors and landlords to create an impressive portfolio of student accommodation properties in the UK."
The strength of the student accommodation sector has been underlined by Unite Group, the country's biggest purpose-built student accommodation provider, who say that 73% of their 76,000 beds have been reserved for the next academic year.
Students can now return to campus
Meanwhile, the Government has given the green light for university students to return to campus from 17 May.
This is Stage 3 of the Government's roadmap on the easing of indoor mixing and social contact.
Practical and creative students have already returned to campus, they were given the green light from 8 March, and 49% of students are now eligible to return for in-person teaching.
However, all staff and students are being encouraged to take regular supervised Covid tests wherever available.
