Investors increased their spending in the student accommodation sector by 16%, to £246m in the first quarter of 2012.
The £246m of investments was a rise on the £212m spent in the first quarter of 2011. According to CBRE figures, £1.1bn was transacted last year.
The agency said demand for long-leased product is strong and, as a result, yields are at 5.5% in top tier regional towns for student housing let to universities.
Deals in Q1 include Liberty Living paying £23m for a 612-bedroom scheme from the University of Leeds.
While there has been a 5.2% fall in 2012 university applicants, students from the Far East are keen to study in the UK. As a result, university places are still expected to be over-subscribed.
Jo Winchester, head of student of student housing at CBRE, said: “Looking ahead, developers will need to not only consider student numbers and bed spaces, but most critically, the financial strength and popularity of universities in conjunction with the underlying dynamics of the property market.”
joanna.bourke@estatesgazette.com
