A record £2 bn (EUR 2.5 bn) was invested in student accommodation in the UK in the first three quarters of 2012 – an increase of 145% on that invested in the first nine months of 2011, new research from CBRE has revealed.
A record £2 bn (EUR 2.5 bn) was invested in student accommodation in the UK in the first three quarters of 2012 – an increase of 145% on that invested in the first nine months of 2011, new research from CBRE has revealed.
As well as rising investment, CBRE has pinpointed a number of changing trends in this sector. Investors are now deploying more capital outside of London than within it, as over half of total investment in 2012 to date has been in regions other than London.
The sector is also witnessing larger deals than ever before. During the past 15 months, the market has seen five £100 mln+ transactions. Prior to Q3 2011, no single deal had exceeded £85 mln.
The University Partnerships Programme (UPP) Regional Portfolio typifies this. Dutch pension fund manager PGGM invested in a 60% stake in UPP’s assets this year, worth an estimated total of £840 mln.
Jo Winchester, head of Student Advisory, CBRE, said: 'Total returns remains a key driver for investors, as they flock towards the impressive returns given by student accommodation for a second year in a row. Our data shows that student accommodation is outperforming other asset classes by some margin, as it has brought 9.6% returns in the year to September 2012. This compares to 5.4% for all offices and 2.2% for all retail in the year to August 2012.'
