Investor demand for sound, income-generating assets has doubled the market for student housing over the past 18 months to over £2 billion per year, according to research published by Savills.
The report Spotlight on Student Housing[1], states that investors’ attention is focused on high quality accommodation, aligned with the best performing institutions, such as Bristol University. With a lack of bank finance and uncertainty over university funding, investment funds have begun to fill the debt gap.
Ben Taylor from Savills development team in Bristol, said: “In Bristol we are faced with an under supply of student housing, particularly at the top end. Our research estimates that just 28 per cent of students in the city are catered for with purpose built housing. Once the supply in a city rises to 40-45 per cent, a market is approaching capacity, so Bristol provides a considerable margin for investment.
“With insufficient funding from the banks and government, we are seeing an unprecedented opportunity for investors. Student housing is considered by many to be a new or alternative sector, but it has outperformed many commercial property asset classes over the past five years.
“Those looking to invest will be seeking locations near universities with rising or stable demand, or those which need to upgrade their residential accommodation, in order to compete for top student talent.
“Bristol ticks all the boxes for investment, with the bonus of growing demand from international students.”
[1] Source: Savills Research
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