PBSA investment hit a record £3.9bn in 2024

PBSA investment hit a record £3.9bn in 2024

0:02 AM, 17th February 2025, About 2 months ago

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Investment in the UK’s purpose-built student accommodation (PBSA) sector last year reached £3.87 billion, a 14% rise from £3.39 billion in 2023, Knight Frank reveals.

The real estate firm says that the final quarter of 2024 saw nearly £575 million invested.

Despite this surge, Q4 volumes fell short of expectations.

Private sector plays a leading role

The firm’s joint head of student property, Merelina Sykes, said: “The private sector continues to play the leading role in providing new accommodation for students, accounting for 81% of all new beds completed last year.

“Looking ahead, the largest concentrations of pipeline in terms of the absolute number of beds are found in cities with large student populations, such as London, Birmingham, Manchester and Nottingham, which together account for just under half of 2025’s pipeline.”

She added: “Deal times for stabilised assets are taking longer because of building safety regulations, which has pushed some transactions into early 2025. That said, overall activity was still robust.”

Investment momentum looks set to build this year and the firm is tracking £1.3 billion of transactions currently under offer.

Shortage of existing properties

Knight Frank says that 66 deals were closed in 2024, exceeding the five-year average of 57, though this was helped by a shortage of existing properties.

There’s also a vibrant land market, with nearly half of Q4 deals involving development sites, culminating in a record year for land sales.

Research shows that 22 development site sales accounted for one in three of all 2024 transactions.

Funding deals and joint ventures accounted for a fifth of activity.

16,400 new student beds

In total, there were nearly 16,400 new student beds added across 63 projects in 2024, a 3% increase.

Nottingham led with 3,639 new beds, followed by London (2,454) and Leeds (1,874).

Holly Lush-Thurston, of Knight Frank research, said: “PBSA developers have taken advantage of a quieter land market and softer pricing over the last 12 months, with some more traditional market participants having taken a ‘wait and see’ approach given challenges around viability and private sales demand.”

The 2025 pipeline is approaching 200,000 beds, with 23% under construction and 48% having planning permission.


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