UK - The UK student accommodation sector is continuing to thrive while most other property sectors feel the pinch in tough economic conditions, according to real estate consultancy group King Sturge. 

"Ever-increasing university admissions and growing interest from private sector and overseas investors mean that student housing remains lucrative," said Philip Hillman, partner in charge of King Sturge's UK-based student housing.

Hillman believes such is the strength of student accommodation developments and projects that it is fast shrugging off its status as a mere sub-sector to become a fully-fledged sector in its own right alongside the traditional residential, commercial and industrial property sectors, and in turn is creating solid investment potential.

"The year-on-year growth in student numbers comes at a time when the private sector is becoming increasingly excited about the prospect of working with universities. At the forefront are the likes of the University Partnerships Programme, which works with universities to design, build, fund and operate academic and residential facilities. Meanwhile investment funds and increasingly, overseas multinationals, are also wanting a piece of the action."

King Sturge noted the UK student residence market is considered to be somewhat mature compared with its continental counterparts, where only 13% have access to accommodation against 23% in the UK.

That said, private investment in the UK sector is now highly competitive and King Sturge believed the UK model will pave the way for the sector to grow elsewhere in Europe.

"For an investor [Europe] has great potential. There is an acute shortage of halls-style accommodation for students across Europe. With both students and universities clamouring for more and better accommodation, demand is at an all-time high and rising year-by-year," the firm said.

"As such, student accommodation provides a relatively secure income stream, and strong rental growth," it added. 

In sharp contrast, other recent research by King Sturge showed other property sectors continued to struggle as a result of the credit crunch, with the industrial and office sectors reporting slowdowns in the number of leasing deals but rises in occupation costs.

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