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Demand still high for student accommodation | 3 October 2012

Property tycoons looking for a new investment might do well to consider student accommodation, given demand is still high, propertywire.com reports.

It has been claimed that the student accommodation sector remains ‘one of the strongest performing real estate investment trends’, despite the reported slight drop in applications this year. That’s according to property investment firm, Knight Knox International, who says that the demand for suitable accommodation has always outstripped demand.

The Manchester-based firm also pointed out that those with student properties in regional cities have experienced shorter void periods and higher than national average rents – both hugely attractive propositions to property investors.

Additionally, figures released by commercial property advisors, CBRE, show that almost £8 million was invested in this market in Q1 2012 – double that which was spent in Q1 2011, indicating that this is becoming a desirable asset class.

Speaking to ftadviser.com, CBRE head of student housing advisory, Jo Winchester, said: “There is no shortage of investor demand, but the market is hampered by a shortage of new quality development opportunities. Proposed changes to the Real Estate Investment Trust, together with the significant increase in the number of new operators in the last four years, could widen opportunities for indirect investors by creating a greater choice of investment funds as well as creating an alternative exit position for established operators.”

Citing an example of a 47-room student development in Nottingham, Knight Knox said that investors could expect to receive a net yield of 9.2 per cent over three years.

Written by Elizabeth Smythe on behalf of Qube Global Software

While posted by Qube Global Software all views expressed are not necessarily those of the company. All facts are verified where possible directly by the author.

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