Bullish outlook for PBSA sector in 2017 as investment builds and interest heads north of the border
- 2016 set to become second highest year on record for investment in UK student accommodation sector (Cushman & Wakefield)
- National student-to-bed ratio rises to 2.3 students per bed space (Cushman & Wakefield)
- ‘Extremely positive outlook for PBSA in the New Year with Edinburgh emerging as desirable location for investment’ (Aspen Woolf)
2016 is set to become the second highest year on record for investment in the UK purpose built student accommodation sector (PBSA), according to the latest just released research by Cushman & Wakefield, with the total expected to reach £3.1bn.
The Cushman & Wakefield report shows that demand for student accommodation remains strong with more students in the system than ever before, as 1.7m are now studying full-time, an increase of 0.4% from the previous year. And despite intensive development in some areas, the ratio of students seeking a purpose-built bed has also increased.
The latest figures that the national student-to-bed ratio has now risen from an average of 2.1 to 2.3 students per bed space, and as competition builds it would seem rents in the sector have also risen, by an average of 2.7% in comparison to 2015.
The report also highlights that the geographical focus of investment throughout 2016 has been in the regions, with the proportion of transactions in London falling by approximately two thirds. This shift away from England’s capital city has made way for another of the UK’s capitals.
Edinburgh is the UK’s most educated city with a significant amount of students staying to work in the city after qualifying. Around 55% of the Edinburgh workforce hold a university degree or equivalent. And with 4 universities and over 58,000 students living and working in the city, demand for accommodation that meets student rising requirements continues to outstrip supply.
Oliver Ramsden Director of Aspen Woolf, leaders in providing wealth building opportunities for investors of all levels through property, is confident in the future of Edinburgh’s PBSA market and all it can offer both regional and foreign investors. He explains,
“The most recent statistics present an extremely positive outlook for PBSA in the New Year and with that Edinburgh is quickly emerging as the desirable location for investment in the sector. The QS World University Rankings 2016/17 have placed the University of Edinburgh 19th in the world, ensuring that student numbers will continue to grow heightening the need for quality student accommodation.”
Aspen Woolf’s newest offering to the PBSA market in Edinburgh is the beautifully constructed, incredibly modern structure that is Braefoot House. Studio apartments start at just £107,800, giving investors an assured 2-year net rental of 7.5%. And investing in the Scottish capital will also provide the now rare opportunity to buy freehold. Oliver continues,
“Investing in property in Scotland offers the additional advantage of freehold ownership, as opposed to leasehold opportunities south of the border, providing longevity and a sense of security. This is a huge benefit for investors, as it makes it considerably easier to sell a property onwards.”
Braefoot House will comprise of two phases totalling 172 executive student studio apartments, set in one of the most affluent suburbs of Edinburgh and less than 0.5 miles from Kings Campus Edinburgh University. The campus is served by a free university shuttle bus service that takes students into the city centre at regular intervals, and also gives students a hefty discount for City Car Club car use.
Residents of Braefoot House will have access to a communal lounge, private cinema room, games room, Apple computer rooms on each level, a laundry and a manned reception. As well as beautiful landscaped gardens surrounding the property and cycle storage.
Apartments are built to the highest standards with glass curtain walling to upper floors and rear elevations. All remaining apartments have brilliant floor-to-ceiling windows providing plenty of natural bright light to the modern living environments.
Each unit includes a microwave combi oven, a fridge/freezer and a ceramic hob. And with the free furniture pack offer, apartments will also benefit from a double bed, wardrobe, desk and swivel office chair, two seater table with two additional chairs, a mirror, waste paper bin and coat pegs.