The UK’s student accommodation sector is on track to reach £72bn by the end of 2022, according to research from Knight Frank.
The agent estimates the sector to be currently worth £69.2bn, forecasting a further £2.8bn to be added next year through some 27,000 beds.
The pace of development rose from 14,000 beds in 2020 to 24,000 beds in 2021, a 71% increase year-on-year, bringing the total to more than 700,000 beds. Knight Frank’s valuation is based on a price per bed of £96,000.
While deal volume has risen, the amount invested in 2021 actually fell, being just £3.9bn compared with £5.9bn in 2020. However, the 2020 figure was boosted by Blackstone’s £4.7bn iQ portfolio acquisition.
The number of sales so far in 2021 is 12% higher than in 2020, and not far off the number in 2019. Deals in 2021 included further acquisitions from Blackstone, Greystar and Mapletree.
Knight Frank added that there were at least a further 20 deals likely to be struck in the first quarter of 2022 and noted strong demand from investors in the US, Singapore and the Middle East.
Merelina Sykes, joint head of student property at Knight Frank, said: “A pick-up in deal volumes is a positive sign for the market, suggesting investors are happy to look beyond the disruption in the 2020/21 academic year and have confidence in the sector’s ability to deliver long-term, stable income streams.”
Neil Armstrong, joint head of student property at Knight Frank, added: “As we look forward to 2022, the focus on student accommodation has never been so acute.”
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