MIPIM UK: There is no room for complacency in the student accommodation sector, Nabarro partner Nick Collins warned the MIPIM UK Student Housing conference.
Collins said that the UK university sector and facilities are world class but that it is under intense competition from universities in other countries.
Collins said that the purpose-built student accommodation sector has grown from about 1,224 beds in 1974 to more than 130,000 now. There are 27 operators and it has attracted £5bn in investment.
Rob Martin, head of performance analysis and research, Legal & General Property, pointed out that the sector is broadly the same size as the retail warehouse sector, which is not considered an “alternative” investment.
He said that while the yield from student accommodation is 5% to 6%, the rental growth expectations are 3% to 3.5% pa.
Brian Lloyd Jones of Unite, which now has homes for 41,000 students and 120 properties in 23 university cities, said that with 1.6m students in the UK there is an imbalance in supply and demand which makes the yield profile attractive compared to other sectors.
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