Transactions hit £2 billion in first nine months of 2012 despite decline in number of students and overall investment is up 145% compared with the first nine months of 2011.
As well as rising investment, the CBRE research 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 the 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 million plus transactions. Before the third quarter of 2011 no single deal had exceeded £85 million.
The University Partnerships Programme (UPP) Regional Portfolio typifies this, said the firm. Dutch pension fund manager PGGM invested in a 60% stake in UPP’s assets this year, worth an estimated total of £840 million.
;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,’ said Jo Winchester, head of student advisory at CBRE.
‘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,’ she added.
The increase in university fees has made a difference to the number of students attending university in 2012/2013. CBRE’s research also indicates that a low number of students deferring from last year, the lower than expected number of AAB students and changing demographics have all contributed to a decline in student numbers, yet investors remain undeterred.
