Student Housing Investment Continues to Grow
Investment in student housing is continuing to grow in the UK and Europe, despite the economic conditions.
According to the CBRE report, £375 million was invested into the thriving sector in the first half of 2011; the first half of 2012 has seen double that at nearer £800 million.
So what of the demand, despite fears relating to increased tuition fees the figures have not dropped, indeed applications from overseas students have increased. This trend is repeated across Europe.
Marcus Roberts at Savills comments, "student housing markets are traditionally counter-cyclical, with student numbers growing in times of economic downturn and weakening labour markets, and this is exactly what is happening in France both in terms of domestic and international students."
Investors should consider location, pricing and investment in the university and the university's profile. It is still possible to secure investment in excellent projects.
Jo Winchester, Head of Student Housing Advisory, CBRE, said "The current lending market is dominated by large-scale loans against well-managed portfolios, but debt remains restricted for new entrants, single property deals and projects outside of London. Whilst they tend to prefer large transactions, insurance companies are able to fund direct let properties and still meet low risk criteria as their exposure is only based on a conservative percentage of valuation."
"There is no shortage of investor demand, but the market is hampered by a shortage of new high quality development opportunities. Proposed changed to the REIT regime, together with the significant increase in the number of new operators in the last four years could widen opportunities for indirect investors by creating a greater choice of investment funds, as well as creating an alternative exist position for established operators."
Principal International currently offers a number of excellent projects within the student housing investment arena and have other superb property investments in the pipeline. Please click here for further information.