King Sturge tips London student digs as 'star performer'

London's student accommodation sector will be this year's star performer as it bucks the negative trend affecting the rest of the real estate market, according to King Sturge.

In its 'London Student Accommodation 2009', the property adviser says the sector is expected to show rental growth in 2009, constituting a key investment opportunity at a time when UK property presents challenges to investors.

'This sector of property is bucking the trend,' says Huw Forrest, Partner, King Sturge. 'There is a major imbalance between demand and supply of private sector student accommodation. From the 250,000 students in full time higher education in London, only 1.5% can access commercially operated private sector accommodation,' says Forrest.

'And in our opinion 50 to 75% of university housing stock is out-dated by modern standards. There’s an urgent need to build more and the time is right for both developers and universities.'

Reduced land values have created an opportunity for specialist developers, operators and investors in the sector of student accommodation. 'Land that would otherwise be out of reach is now better value,' adds Forrest, 'We expect to see more strategic joint ventures being formed between existing UK operators and overseas investors as traditionally, there are a number of barriers to entry into this sector.'

The report notes that the sector could also attract overseas investment. 'The continued depreciation of the sterling against the euro and the US dollar has made the UK more attractive to foreign investors,' says Forrest.

King Sturge's specialist student accommodation consultancy team is the largest in the UK and in 2008 the firm advised on over £2.5 bn of student accommodation.

Click on the link below to download a copy of the report or go to http://www.kingsturge.co.uk/london-student-accommodation-market/index.htm