Student housing attracts £2bn worth of investment says CBRE

Kasmira Jefford
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INVESTMENT in student accommodation in the UK has soared to a record £2bn since the start of the year, despite the sector seeing a decline in student numbers following the hike in tuition fees.

New research from property consultants CBRE published yesterday showed that investment into student accommodation jumped 145 per cent in the first nine months of the year compared with the same period last year.

During the past 15 months, the market has seen five deals over £100m. Prior to the third quarter of 2011, no single transaction had exceeded £85m.

Dutch pension fund manager PGGM bought a 60 per cent stake in the UK’s second largest student housing operator University Partnerships Programme (UPP) from Barclays earlier this year, worth around £840m.

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.

CBRE said the sector brought returns of 9.6 per cent in the year to September 2012 compared to 5.4 per cent for all offices and 2.2 per cent for all retail.