If you have been following the UK property investment market over the past 12 month then you will know that there has been a huge growth in student accommodation investment opportunities.
Here are 5 salient reasons why a growing number of people are opting to make a student accommodation investment.
Links and support from Universities
As well as having a limited amount of accommodation, many university halls of residence are out-of-date and need modernisation. Due to budget constraints the universities are more than happy to work with private accommodation providers, as long as the accommodation is good enough quality and meets their desired criteria and standards.
Top Asset Class
UK Student accommodation has performed very well as an asset over the past few years delivering consistent high yields.
The CBRE reported that last year student housing strongly outperformed other property asset classes delivering total returns of 9.6pc for investors, compared with 4.4pc for all office properties and 2.2pc for all retail.
Savills 2012 spotlight on student housing also stated that,
“UK student accommodation performed well over the last 5 years, showing average annual total returns outperforming many commercial property asset classes.”
Student Accommodation Investments Are Relatively low risk
With great demand and high occupancy rates investing in right type of quality student housing, in a good location should be the strategy to follow. Jo Winchester, head of student advisory at CBRE explains,
“As an investment, student accommodation is relatively low risk and provides a secure income. Occupancy levels remain high, especially when compared to the vacancy rates in some mainstream sectors, and most university towns remain under-supplied.”
When managed by a professional management company fantastic occupancy levels of almost 100% can be achieved.
Knight Frank declared student property the best performing property investment in 2012, with rental income rising by 5 per cent per annum and returns averaging 11.5 per cent.
Strong exit strategy
Student accommodation investment properties are an asset that are growing in popularity with rising demand from property investors.
When good and consistent rents are achieved they becomes more valuable, and easy to to sell. When re-selling they can be of particular interest to other investors.
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