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The latest news and events at Maples Teesdale

| 1 minute read

Student Accommodation sees green shoots of spring

Warmer weather, impressive vaccination figures and a slow easing of lock-down measures and it is no wonder that one starts to see the green shoots of spring. With the planned return from 8 March of in-person learning for students who are studying practical or practice-based subjects and need specialist equipment and facilities, there is a marked optimism in the student accommodation property market.

The sector, like so many, has undoubtedly been affected by the pandemic but it has remained appealing to investors and remarkably resilient. With an ever growing student population, and greater demand for higher specification accommodation, it is easy to see the appeal of this asset class and in particular purpose built student accommodation (PBSA) to investors. With the likes of Greystar acquiring five PBSA assets in London, Glasgow, Coventry and Bristol (marking its re-entry into the regional UK student accommodation market following the sale of the iQ portfolio to Blackstone in early 2020) and a joint venture between Ares Real Estate and Generation Partners acquiring two student accommodation buildings in Exeter and Cardiff for £157m, there is certainly investor appetite in the sector.

Occupancy rates will clearly remain an issue in the short term until all restrictions are eased and there is a full return to in-person learning. However, once they are allowed to return, there will no doubt be a strong desire from students to do so. There is nothing like months stuck at home with family to make student accommodation and the freedom it affords look more appealing than ever.

“Regardless of the pandemic, student housing remains a counter-cyclical asset class, so while near term occupancy may be temporarily affected, we expect rental rates to remain resilient. Student numbers tend to rise with unemployment as graduate students ‘retool’ for the recovery phase of the cycle.”

Tags

real estate finance, zoe miller, student accommodation, greystar, pbsa, alternative investments, commercial real estate, commercial property, living