17
“2013 is predicted to be the strongest year yet for retail investment into purpose built student
accommodation with more than 55 schemes expected to launch”
The directly held purpose built student
property sector experienced a large amount
of growth in 2012 with 46 new schemes
launched to retail investors. There have
already been 28 new product launches in
2013 with further new schemes expected
to launch in the coming months. It is likely
that by the end of the year over 55 schemes
will have been launched to retail investors,
representing a huge increase in student
accommodation throughout the UK. This
would signify nearly 20% year on year
growth in the retail investment sector.
As you can see from the map on the left
it is clear that the majority of schemes
are based in cities in the North-West of
England. Liverpool accounts for over 26%
of the market with 21 schemes, followed by
Manchester (8), Nottingham (7) and Leeds (6).
It is not clearly evident why Liverpool has
such a high requirement for purpose built
accommodation, in fact as you can see
from the data on the right there is actually
a decline in student numbers in Liverpool.
Over the last 5 years acceptances to the
three main universities in the city have
fallen by between 10% and 20%. This
is likely to have a long term impact on
student numbers and demand for student
accommodation in the city.
An increasing number of purpose built student properties are being marketed to retail investors
Demand for UK university places has risen by nearly 12% over the last 5 years
Acceptances into UK Universities from 2007 to 2012 rose by 12.45% with a peak in 2011/12 of 492,030, however fell by 5.51% in the
current year (2012/13)
2012/13 is the first year of higher tuition fees in the UK of £9,000 per annum
British students starting a 3 year undergraduate degree in September 2012 could graduate owing fees of up to £27,000 (with debts of
£50,000 including maintenance loans)
London has been highlighted as the most attractive city for investment with 291,000 full-time students across 40 HEIs, but only 15.4% of
students housed in university-owned accommodation
Manchester, Bristol and Oxford are also considered strong investment locations, although as noted earlier there has been a downward
trend in university applications in Manchester
The best location for student property investment cannot be judged on figures alone and it would likely come down to the management
company and the buildings quality and price for the investment to ultimately be a success
Certain UK cities are experiencing an oversupply of accommodation and a gradual fall in student numbers
Student property can be a suitable investment but should be considered illiquid and high risk
University
The University of Manchester
Manchester Metropolitan University
The University of Liverpool
Liverpool Hope University
Liverpool John Moores University
Rank
41
108
45
N/A
98
ACCEPTED APPLICANTS MANCHESTER & LIVERPOOL
Source: HESA
2008
9,294
8,737
4,417
1,668
6,923
(2008 - 12)
2012
7,861
7,642
3,945
1,476
5,473
% Change
-15.42%
-12.53%
-10.69%
-11.51%
-20.94%
:
SUMMARY
SECTOR GROWTH
(2012 - 13)
ANTICIPATEDGROWTH
55
Student numbers have also declined in other cities in the North-West and other low ranking
universities as a result of students focusing on higher ranking universities. It is not yet
evident whether oversupply will have an impact on investors in these schemes although the
full impact may come when investors choose to exit.
46
2012
2013
28
