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.
