UK student housing attracts EUR 1b of funds in 2011

Nearly £840 mln (EUR 1 bn) of capital has been committed to investment and development in the student accommodation sector in 2011, new research of CBRE has revealed. This is more than double the £350 mln allocated to the sector in the whole of 2009.

Student accommodation has proved popular with investors attracted by the stable annual income and positive yield movements over the course of last year. Rents have grown by four per cent regionally and by nearly 5% in London during 2011 with occupancy rates currently at around 99% on average.

CBRE anticipates that rather than leading to an overall decline in student numbers, substantial increases in higher education fees will drive a shift in the type and composition of the student population. Overseas students will play an increasingly important role in UK higher education international student numbers anticipated to increase by an average of 3-6%.

Jennet Siebrits, head of residential research, CBRE, said: 'Student accommodation is more attractive than many other asset classes in the current climate and we have seen increasing interest from relatively new parties seeking to diversify their portfolios. While investor appetite will remain strong next year, it is narrowing its focus on well-located schemes that have long-running agreements with good universities.'

The private rented sector still houses the highest proportion of students at 27%, followed by institutional halls and students' families both of which house 19% of the population.

Source http://www.propertyeu.info/newsletter/default.asp?id=19172

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

 

Student accommodation demand expected to stay strong in the UK

There is still plenty of demand for student type accommodation despite early evidence of fewer university applications for 2012 due to higher fees and the economic downturn, according to property professionals.

Some sectors have argued that university towns could see fewer students needing rented accommodation within the relevant catchment areas. However, Caroline Kavanagh, group lettings director of Townends estate agents says there is no evidence of this.

‘The recession now has been going for a number of years, and young students don't have the same financial backing from their parents anymore, meaning that university is just not an option for some since yearly fees rose to as much as £9,000. This has meant that there seems to be a new trend of fresh out of school or college students wanting to earn money straight away and not take the university route, and this has been supported by an increase in applications from this group,’ she said.

‘As well as tuition fees, the general cost of living has increased so there are more financial factors to be considered. Inflation rises have pushed prices up across the board, and this has meant we are seeing more and more sharers in the lettings market as people can't afford to live on their own, especially if they are just starting out from school or college,’ she explained.

‘Although this increase in demand has been seen throughout our branch network, it does mean that in locations that we operate in with a university close by, appropriate accommodation will be required, making up for any shortfall as a result of fewer people studying at university,’ she added.

Reports have also suggested that it is a different story when looking at overseas students, as early figures show an increase in applications. ‘With this also in mind, there will definitely not be a shortage in demand for student accommodation,’ said Kavanagh.

Meanwhile, Savills London Planning team, on behalf of Alumno Developments, has gained planning permission for student accommodation and commercial space at the junction of  Hampton Street and Steedman Street, London, SE17, a new departure for the local council.

It will create 221 student beds and 1,308 square meters of commercial that will be used for start up businesses, incubator units and a coffee shop.

Approval follows many months of significant negotiations with the London Borough of Southwark officers, particularly with regard to financial contributions. ‘This is a significant decision from the London Borough of Southwark as it shows that the Council is willing to consider university led schemes, based on viability and recognises the importance the universities play in Elephant & Castle,’ said the team’s Scott Hudson.

The scheme will provide affordable student residential and start up/incubator units, which will be allocated by the University for local students.

Source http://www.propertywire.com/news/europe/student-property-invest-demand-201112085859.html

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

Student market a great place to invest

Entrepreneurs looking to secure a good return on their investment may be encouraged to consider making a money transfer and entering the student housing market.

According to marketing director at FreshStart Living Stephanie Sowerby, there are plenty of profitable opportunities in the sector.

She suggested that unused city-centre buildings are an untapped resource as there is often a shortage of space in central locations.

"Universities are constantly looking for cheaper accommodation to offer their students," Ms Sowerby commented, adding that disused spaces can often be purchased for a cheap price.

As a result, transforming a vacant lot into a profitable series of flats is "very easy and cost effective", it was claimed.

Ms Sowerby went on to state: "By taking advantage of unused buildings, developers can usually obtain planning permission very easily."

Those considering following the specialist's suggestion and entering the student housing market may want to take heed of her recommendation to find a suitable building that is centrally located.

Individuals were advised there is a current shortage of accommodation for undergraduates as many universities have been forced to sell their halls of residence due to funding problems.

This was noted by Ms Sowerby as providing a "rare opportunity" for people outside of the establishment to enter the student housing sector.

In conclusion, the expert remarked that property developers can usually find an unused building and develop it at a cheap cost, which means the savings can be passed on to investors and then students that rent the apartments.

Director of Easyroommate.co.uk Jonathan Moore recently commented that high-quality accommodation and luxurious flats are often favoured by overseas undergraduates, as they generally have bigger budgets than individuals from the UK.

Posted by Chris Barber

Source  HiFX's Foreign Exchange services.

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

Student market to remain buoyant in 2012 experts suggest

Building contents insurance for landlords may become a much sought-after product next year, as it has been predicted the student lettings market will continue to be buoyant.

London estate agents LDG noted more university goers were looking for rented accommodation this year than in 2010.

Indeed, the volume of students looking for homes increased to the extent that half of all tenancies handled by the company were to this demographic in 2011.

Partner and lettings manager at the organisation Javier Carrillo explained the demand for rented accommodation has been boosted by the decision to raise university tuition fees.

This is a trend also noted by asset management company Kames Capital. With head of property investment Phil Clark saying the houses lived in by students present a good opportunity for those who want to make money in the buy to let sector.

"I believe investors should consider a greater exposure to alternative sectors such as residential property, student accommodation or healthcare property," the expert stated.

"One of the key attractions of these alternative sectors is they generally have a high income yield, an ability to track inflation and have low vacancy rates," he added.

He advised looking into these opportunities in 2012, although he warned the property market could continue to be "challenging" like this year was.

This is why looking at fundamental drivers like the number of people interested in the paying for accommodation, is important.

Mr Clark explained this is why the house sector remains a good one in university towns because swathes of young people are still planning on going into higher education despite the tuition fee rises.

"Student accommodation demand for the best universities is leading to typical annual vacancy rates of less than two per cent," he revealed.

The specialist also pointed to the residential sector in the south-east of England for some more great opportunities to invest.

Some areas of this region as seeing rental increases of as much as seven per cent per annum, with demand outweighing supply, he stated.

Those hoping to pour money into houses in the south-east may be pleased to hear partner at LDG Laurence Glynne was particularly upbeat about London's West End.

He noted a lack of available property on the market has seen a boost in the amount of money people will pay for houses.

"We have achieved record prices in favoured West End apartment buildings," Mr Glynne stated.

"Theatre, arts and the cultural energy in the West End have a significance in attracting people to property in the capital, whether for their primary residence, investment or renting," he added.

Meanwhile, Mr Carrillo noted an increase in lettings in London to individuals, with one and two-bedroom flats in the middle of the market doing particularly well, which he attributed to a wave of redundancies in the City, leading to a drop in professionals sharing property.

Another factor that is driving a buoyant rental market in the capital is the coming of the London Olympics in 2012.

When the Games arrive, Mr Carrillo expects to see a rise in demand for short-term contracts in serviced apartments.

Furthermore, the lettings professional was very optimistic about the current conditions for landlords in London.

"London remains the financial centre of the world and is seen as one of the safest havens for city living," he noted.

He also remarked that renewals are up 40 per cent and there are no indications they will fall again in the next year.

Tenants are choosing to stay put because would-be first-time buyers are unable to get their hands on finance, there are not many available houses on the market and rents are more achievable.

Elsewhere, spokesman for affordable house prices campaign website PricedOut Matt Griffith gave advice that may also spell good news for landlords.

He told first-time buyers not to look for property to purchase in 2012, encouraging them instead to "batten down the hatches whilst they wait out for a saner housing market and lower prices".

Should people follow his advice, it could mean individuals are forced to stay in rented accommodation for another 12 months.

"The outlook for first-time buyers is pretty grim," Mr Griffith said. Earnings are down, the threat of a slip back into recession is looming, worries are abound over the eurozone debt crisis, high deposit requirements look as if they are not yet close to falling and banks are beginning to tighten up their lending criteria yet more.

With each of these downbeat factors affecting the housing market, 2012 could be "seriously depressing" for first-time buyers, Mr Griffith said.
Source http://www.simplelandlordsinsurance.com/news/article/00310/student-market-to-remain-buoyant-in-2012-experts-suggest.aspx

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

Banks buy up student digs as rents soar

Financial institutions spent £2.2bn on residential properties in the last financial year, up from £765m in 2009/10 and at the highest level since before the credit crunch, according to City law firm Wedlake Bell.

Jeremy Raj, head of the firm’s Residential Property team, said there had been “strong investment” in the student accommodation market, both from UK and overseas institutions.

Mr Raj added: “There has been a startling jump in purchases of UK residential property by institutional investors. Institutions are being attracted to residential property because of improving market fundamentals, including high tenant demand, high rents and a supply shortage that shows no immediate signs of abating.”

He said that the market was still feeling the effect of the freeze in new builds during the credit crunch. The supply shortage has helped push up average rents to £720 a month, by some estimates.

Mr Raj said that financial institutions had previously been reluctant to invest in residential property due to the high costs of managing a residential portfolio.

Government action such as stamp duty breaks had also contributed to the newfound institutional appetite for such properties, he said.

Total purchases of residential property increased by 24pc, from £346bn in 2009/10 to £429bn in 2010/11. Property companies increased their purchasing by 27pc to £7.5bn, while purchases by individuals increased by 24pc to £193.8bn, the firm said.

Source : http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8964529/Banks-buy-up-student-digs-as-rents-soar.html

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

Student accomodation group Unite increase bookings

STUDENT accommodation group Unite said it is on course to deliver a recurring profit for the full year ahead of management expectations.

In a trading update today covering the period from its half year results on July 1 to November 15, it said 99% of its 41,000 rooms, in more than 130 properties across the UK, have been sold for the 2011/2012 academic year, compared with 97% for 2010/2011.

Liverpool is Unite’s third biggest market, embracing 10 properties, including the Grand Central development in Skelhorne Street, providing a total of 3,372 bed spaces.

Like-for-like net group operating income is 3.1% ahead and £145m of new debt facilities have been arranged or extended.

Lettings for the 2012/2013 academic year started in early November and Unite says it has seen an “early positive response”, adding “initial discussions with universities regarding their demand are also encouraging and we expect rental growth for 2012/2013 to be at a similar level to this year”.

Unite says the increase in tuition fees in 2012 is likely to result in a headline drop of between 5% and 10% in applications next year.

But it said it does not anticipate a reduction in actual student numbers “nor in the number of students requiring good quality, purpose build accommodation”.

Mark Allan, Unite chief executive, said today: “We have continued to make good progress in line with our strategy and have seen excellent performance through the third quarter, in terms of reservation levels, customer service and financial performance.

“We remain well positioned to outperform the wider student accommodation sector as a result of our London focus, the high quality of our portfolio, strong university relationships and our established brand platform.

“However, we continue to monitor closely the capital markets and the broader economic picture and believe that a cautious approach to investment and managing debt is prudent in the near term.”

Source http://www.liverpooldailypost.co.uk/ldpbusiness/business-local/2011/11/16/student-accommodation-group-unite-increases-bookings-92534-29786513/#ixzz1n05Qe6U4

London Student accommodation 9% yield property

Bradford Student accommodation 10% yield  property

University student housing sees £800m investment rush

According to property agent CBRE, institutions and overseas buyers are being attracted to the sector by its stable income as the rest of the property market is riddled with economic uncertainty.

Research shows an estimated £836m was committed to deals and development in 2011, up from £770m in 2010 and £350m in 2009.

The increase is despite student applications for the next academic year falling in light of the Coalition increasing tuition fees.

Jennet Siebrits, head of residential research at CBRE, said: "Student accommodation is more attractive than many other asset classes in the current climate and we have seen increasing interest from relatively new parties seeking to diversify their portfolios."

The CBRE research says 99pc of student accommodation is occupied in the UK. Rents increased over the year by 4pc outside London and by 5pc in the UK capital. 

Deals in the last 12 months included Legal & General paying £116m for the Griffon Studios development for Imperial College.  Sourcehttp://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8987844/University-housing-sees-800m-investment-rush.html 


London Student accommodation 9% yield property


Bradford Student accomodation 10% yield  property

Student housing sector booms as tuition fee hikes loom

Almost £840 million was invested in the development of student accommodation in 2011, new research by CBRE has revealed

The stable income on offer amid a tumultuous year helped more than double the £350m invested in the sector in 2009, reported sister title Construction News.

Rents have grown by four per cent regionally and by nearly five per cent in London during 2011 with occupancy rates currently at around 99 per cent on average.

CBRE anticipates that rather than leading to an overall decline in student numbers, substantial increases in higher education fees will drive a shift in the type and composition of the student population.

Overseas students will play an increasingly important role in UK higher education with international student numbers anticipated to increase by an average of three to six per cent.

CBRE head of residential research Jennet Siebrits said:  ‘Any uncertainty in the wider higher education market is not reflected in the accommodation sector and we expect the strong rental growth to continue next year.

‘Student accommodation is more attractive than many other asset classes in the current climate and we have seen increasing interest from relatively new parties seeking to diversify their portfolios. While investor appetite will remain strong next year, it is narrowing its focus on well-located schemes that have long-running agreements with good universities.’

The private rented sector still houses the highest proportion of students at 27 per cent, followed by institutional halls and students’ families both of which house 19 per cent of the population.

Comment: BDP chair Tony McGuirk

It is very apparent that a number of forces are in play regarding residential accommodation for students.

Tuition fees have created more of a consumer attitude in students regarding both their teaching and their living quality which most universities are looking to respond to with new schemes.

Local Authorities aware of the competition for rented housing are taking more strategic steps for new student provision to alleviate the effect on families seeking rented accommodation. This has obviously been exacerbated by recent announcements by government regrading housing benefits and the effect recently reported by the Chartered Institute for Housing, seeing the competition in the private rented sector even more fierce.

We are also seeing a new trend in today’s students for the better or more serviced living accommodation provided by modern student residences within universities with trends to enjoying living within larger student groupings for interaction, common experiences and safety often enjoyed within the university campus. This has also been running in parallel with the significant expansion over in the 60s and 70s (new) universities which by their very being were located in greenfield campus settings.

Source http://www.architectsjournal.co.uk

London Student accommodation 9% yield property

Bradford Student accomodation 10% yield  property