Corporates sink millions into student letting

Corporates sink millions into student letting

16:05 PM, 27th April 2012, About 12 years ago 5

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Corporate investment in student letting was up 50% to £1.15 billion last year as rents and yields continue to go through the roof.

The flood of institutional money into student accommodation has continued in the first three months of 2012 with nearly £250 million invested, according to property consultants CBRE.

This year’s increase in tuition fees up to a maximum £9,000 for the academic year starting in September has slightly dented applications for courses, but universities are still receiving more applications than they have places.

Any shortfall in places is easily taken up by students from overseas, whose numbers continue to grow.

According to UCAS figures, applications from outside Europe grew by 12% year on year. The largest numbers came from Hong Kong (37%) and Australia (15%).

Jo Winchester, Head of Student Housing, CBRE, said: “Applications are currently 80,000 ahead of the number of acceptances in 2011. While we do not expect student numbers to fall nationally due to fee increases, we do anticipate wide variations at a local level. However, it is still too early to identify which universities will have reduced cohorts in 2012 and how demand for accommodation will be affected in those towns.

“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. Support from universities together with clever structuring is likely to assist planning and funding solutions for new development.

“The recent figures have shown investors that now is a good time to buy student properties as property yields look very positive.”

Despite the massive investment by corporates and universities in providing halls of residence, even the largest corporate only has 44,000 bedspaces.

Halls offer around 30% of the bed spaces needed by students across the UK, leaving private landlords to take up the student letting slack.

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8:54 AM, 30th April 2012, About 12 years ago

Great isn't it.
Council's give planning permission for purpose built corporate stuff whilst simultaneously hitting private houses with HMOs. Meanwhile government private-public partnerships operate from universities using compulsory student attendance meetings to drive the punters(students) out of the free market and into the correct pockets (the corporate financed stuff). So this is orchestrated capitalism for the chosen few - isn't that what we call Russia ?

7:13 AM, 1st May 2012, About 12 years ago

Even the banks have realised that the best investment is property.
So get out of the way all you irrititating small LL, make way for the big boys.
We have our chums in govt who won't bother us with all these silly regulations that are being imposed on you little lot.
I don't think so!
He who has the biggest amount of leveraged cash will squash anyone else playing by the rules.
I would get out of the student market and look at family property provision.
Less hassle and consistent albeit less income!

13:39 PM, 1st May 2012, About 12 years ago

 So far as I am aware letting a property carries the same regulatory restrictions whether that is a purpose built corporate apartment or a private house? If the universities were not gaining corporate investment the shortfall in rental housing would be even more extreme. Students are an attractive investment precisely because they are a captive market and there is pastoral support through the university. If (in some fantastical place) councils were able to ring-fence housing funds, to offer pastoral support to LHA tenants, to manage properties, to offer 12 month tenancies, to make rent payments direct to landlords and through all this allow passive investment, would the same appeal exist in other sectors than students for corporate investment?
I see no issue in universities guiding students in their housing choices. The risks of shared tenancies, off-campus with housemates dropping out and parents picking up the bill hardly seem appealing by comparison. it's worth noting that in many cases it's the parents not the students who are paying. It is an a-typical tenant type.

9:20 AM, 2nd May 2012, About 12 years ago

And that's just how easy it is to say the right words to students and their parents to help move things along. My point exactly.

10:16 AM, 2nd May 2012, About 12 years ago

 I don't understand? You point is what? That universities offering a secure, purpose built accomodation option to their students is wrong?

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