Share:

Confidence in UK Student Accommodation Remains Upbeat Despite Levels of Transactions Slowing

13/08/2020

Investment in the UK student accommodation market hit a record £5.15 billion in the first seven months of 2020, despite a fall in transactional activity since February.

The figures, released by Cushman & Wakefield in its annual A-Level Results Briefing, revealed that transactional volumes for the sector will be one of the highest on record this year, although the figures are skewed by the sale of student accommodation provider, iQ to Blackstone for £4.7 billion in February, the largest ever UK private real estate deal.

The number of transactions fell by 60% from last year, largely due to the impact of COVID-19. However, July saw the most deals on a monthly basis since February indicating a return in confidence to the sector amid greater certainty about the 2020/21 academic year.

According to UCAS, 358,860 students across the UK have been accepted for places at university for 2020/21, up 2.9% on 2019. The number of students accepted to higher tariff institutions has also risen to a record high, with almost a third of students set to study at these universities.

Cushman & Wakefield estimates there is circa £1.5bn of assets available in the UK with approximately 15% of this currently under offer. The figure is below 2019 levels which stood at £2.2bn for the same period. In addition to new and existing stock, more than £300m of assets are on hold and likely to come back to the market later this year.

Cushman & Wakefield projects 25,000 new beds should enter the UK PBSA market this year, the lowest number since 2014. Around 3,500 beds have exited the market this year, which will help to offset increases in beds in what could be a turbulent academic year for some providers.

Many new build schemes have been delayed by the impact of COVID-19. Currently, 3,400 beds which were initially planned and marketed for the 2020/21 academic year will instead open either in January or September 2021. Currently there are 107,000 beds in the PBSA development pipeline, of which 61,000 have full planning approval.

Russell Hefferan, Partner in Cushman & Wakefield’s Student Residential Investment team, said: “We anticipate an increase in market activity from September when universities reopen. This will help present a clearer picture for investors who will be closely monitoring the autumn occupancy and effects of any further lockdowns on their income.”

David Feeney, Partner in Cushman & Wakefield’s Student Accommodation Advisory team, said: “The true impact of the pandemic on rental growth and occupancy will be felt very late into the letting cycle and headline rental growth for the 2020/21 academic year will be somewhat misleading in some markets.

He continued: “Discounting and incentivisation is widespread in certain locations, with the impacts of COVID-19 amplifying issues associated with digestion of large numbers of new beds. However, the higher education sector has proved to be counter cyclical during previous recessions and there is evidence of above inflation rental increases in the strongest markets, even in the face of the uncertainty caused by the pandemic.”

 

MEDIA CONTACT

Seetle Dool Cushman & Wakefield

Related Insights

empty lecture theatre
Insights • Education

Student Accommodation

The lack of certainty over the 2020/21 academic year and impact on student intake has caused some investors to be more cautious. 
Sarah Jones • 21/04/2020
students sitting on low chairs looking at papers
Research • Education

UK Student Accommodation Report

The Student Accommodation Annual Report provides insight into the trends in student accommodation demand, supply and investment during the year to date.
David Feeney • 12/12/2019
room interior with white bicycle, desk and files
Insights • Investment

European Student Accommodation Guide

Cushman & Wakefield's latest European Student Accommodation Guide highlights trends in European markets and showcases those markets where student accommodation investment interest is increasing.
Paddy Allen • 15/05/2018

RECENT NEWS

Novotel Hotel, Paddington Village, Liverpool
Liverpool City Council signs Accor and Legacy for New Concept Novotel Hotel

Liverpool City Council has selected Accor’s new design Novotel as the franchise brand for a new 221-bed flagship hotel which will form part of the award-winning Paddington Village development in the city’s Knowledge Quarter. 

21/09/2020

Moog Controls Exterior CGI
Funder Sought for Prime Industrial Investment

Property development and investment company, Barberry Industrial has launched its search for a forward funding partner for a prime, long-income industrial investment let to Moog Controls. 

18/09/2020

QIAGEN Reception CGI
C&W Awarded QIAGEN Citylabs 2.0 Brief

QIAGEN, a global leader in Sample to Insight solutions for molecular testing has appointed Cushman & Wakefield to provide Project & Development Services for its £35m new base in Manchester. 

16/09/2020

Swansea City Centre & Beach
Search for a Strategic Partner to Shape Swansea Begins

Swansea Council has officially launched its search for an experienced and committed partner to help it deliver its vision for a vibrant and distinctive city in which to live, work and spend quality time.

09/09/2020

Modern warehouse
Marchmont buys Virgin's facility in Crawley

Marchmont Investment Management in conjunction with Pictet Alternative Advisors have purchased the freehold interest in Virgin Atlantic’s Training Centre in Crawley for c.£30 million.

24/08/2020

data center
Cushman & Wakefield Identifies Emerging European Data Centre Hotspots

New research from Cushman & Wakefield has identified Berlin, Reykjavik, Oslo, Warsaw, Zurich, Milan, Vienna, Madrid and Prague as emerging hotspots for data centre development in Europe.

18/08/2020

CGI image of the development on Lightbody Street, Liverpool
Plans for Former Liverpool Docks Site Revealed

Plans for the transformation of a site situated next to the historic Stanley Dock in Liverpool have been revealed.

18/08/2020

25 Cabot Square London
Sadaqat Hussain
Goods Corner, Edinburgh
Edinburgh and Leicester Student Properties Sold for £22m

90 North Real Estate Partners, in partnership with Rasameel Investment Company, has acquired two newly built student accommodation properties in Edinburgh and Leicester for £22 million. 

27/05/2020

Self Storage graphic
Demand for UK Self Storage Space Remains Robust

Demand for self storage space in the UK remained robust in 2019 and the sector is well placed to deal with the impact of COVID-19, according to new research into the sector’s major operator and customer trends from Cushman & Wakefield and the Self Storage Association UK (SSA UK).

14/05/2020

Captain Barnard Public House, Otterbourne
Prime Hampshire Development Site Sold to Barchester Healthcare

A prime development site close to Winchester has been sold to Barchester Healthcare.

14/05/2020

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.