The UK’s purpose-built student accommodation sector is set for a record year of transactions in 2017, according to Knight Frank
Knight Frank predict that a massive £5.96bn will be traded in the sector this year, a big increase from the £5.1bn of student property deals recorded in 2015.
With £1.9bn already transacted, it predicted that appetite for student accommodation would remain strong and noted that a number of landmark portfolio deals were expected to take place later this year.
Knight Frank predicts that UK’s purpose built student accommodation sector is set to reach a total value of £45.8bn by September 2017 while rental growth of 2.5% is expected.
Interest is expected to come from international institutional investors attracted by the strength of the UK’s higher education sector. Just as it did during the economic downturn, UK student accommodation is proving resilient to concerns about Brexit. While it may be that the weaker pound is more attractive to overseas students, it also proves the ongoing demand for UK higher education
“The asset class has firmly proven itself as a secure and resilient investment in uncertain times, with global capital continuing to pursue high-quality purpose-built student accommodation opportunities,” said James Pullan, Knight Frank’s head of student property.
“Driven by rental growth, strong demand from domestic and international students and a healthy development pipeline, we anticipate that 2017 will be the best year on record for the sector.”
We are certain that UK student accommodation is set to remain popular due to its recession-proof qualities, alongside supply still unable to keep up with demand across the UK. The sector has grown by 37% since 2014, from £30.9bn to £42.5bn, making it one of the fastest growing asset classes in the UK property market.