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UK student housing investment remains high

UK STUDENT HOUSING INVESTMENT REMAINS HIGH

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12 May 2018

Levels of activity in the UK’s student housing investment market have remained high into 2018, with £1bn of transactions reported in the first quarter. Research by JLL outlines a continued supply and demand imbalance for PBSA, which remains highly attractive to investors due to population growth and the increasing global demand for the UK’s provision of world class higher education.

One of the major portfolio transactions in Q1 was Brookfield Property Partners’ purchase of the Curlew Portfolio for approximately £520m. Meanwhile, individual assets are also transacting indicating high demand across the investment market. Unite Students purchased 123 Fountainbridge in Edinburgh for £24m and Empiric Student Property acquired Emily Davies Halls of Residence in Southampton for £10.4m.

Recent data from Knight Frank highlights that 23,000 PBSA beds are due to be completed across the UK by the start of the 2018/19 academic year. A further 11,000 beds are under construction or in planning, ready to be delivered in the 2019/2020 academic years.

Despite the volume of student accommodation planned or underway, this level of potential future supply will not address the current imbalance, which is evident in a number of key UK cities such as Birmingham, Bath and Edinburgh. The undersupplied provision of PBSA together with security of income and the defensive characteristics of the sector remain the key drivers attracting investment.

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