The UK's PBSA sector is set for a bumper 2021 with record investment highs as new entrants pour in, one real estate firm says.
The prediction from Savills highlights that the purpose-built student accommodation sector continues to grow and 2020 was a record-breaking year with investors spending £5.77 billion.
That's a 5.7% rise on the year before with large purchases of PBSA providers taking place.
Savills highlights the acquisition of iQ Student Accommodation from Goldman Sachs by Blackstone for £4.6 billion.
‘Staggering’ number of new PBSA investors
However, since the start of last year, Savills says the number of new investors has been 'staggering'.
And they say more are following which underlines investor confidence in the UK's PBSA sector.
In a report, Savills says: "PBSA occupancy in 2020 was lower than expected as students were forced to leave their accommodation because of the Covid pandemic."
They highlight that student accommodation provider Unite saw occupancy rates fall from 98% to 88%.
'PBSA yields this year have remained stable'
The report adds: "PBSA yields this year have remained stable and are supported by a stringent rent guarantee structuring.
"This yield stability is reinforcing how investors are attracted to PBSA for long-term income streams and demonstrating the asset class's maturity."
They also highlight that the challenges during the Covid pandemic to global student mobility has been a 'temporary setback and not a structural' one.
The managing director of Accommodation for Students, Simon Thompson, said: "The UK's PBSA sector is showing resilience and the influx of investors is a good sign.
"With growing student numbers, particularly from overseas, in the UK's universities means there are growing opportunities for private student landlords and PBSA investors alike."
Student accommodation specialist sees profits fall
Meanwhile, the build to rent (BtR) and student accommodation specialist firm, Watkin Jones, says its pre-tax profits have fallen by 3.3% to £25.8 million.
The firm's chief executive, Richard Simpson, said that all parts of the business are performing well, and the falling profits is down to the Covid-19 pandemic.
The company is also looking to fix the cladding on its schemes and will be spending £15 million doing so.
They have also revealed that they have won planning permission in Hove, East Sussex, for a 216 home BtR scheme.
The company is also undertaking the building of more than 500 homes in BtR schemes in south-east London and Leicester.
