Investment in student housing in the UK is expected to increase in 2018 with international students playing a pivotal role, a new report suggests. But there is concern that the industry is oversupplying the wrong type of accommodation.
The increase in international student numbers over the last decade and the fall in the value of the pound are cited as reasons for strong investment in the British student accommodation market, according to the Cushman and Wakefield UK Student Accommodation Report 2017/18.
“International students are just as varied as home students…so having a diverse and good quality housing sector is helpful”
“Universities UK estimates that international students contribute £25.8bn of gross output every year,” according to the paper.
“Universities continue to lobby hard to ensure that the UK remains inviting to international students and that any future immigration policy changes do not restrict the mobility of students.”
The research highlights that private sector development in the UK has dominated the new supply of 30,000 new beds in the 2017 academic year.
But it also says that universities still provide the largest number of bed spaces – “offering 57% of all rooms available in 2017/18, with the private sector providing the remaining 43% of beds – up from 41% in 2016.”
En-suite spaces made up 52% of all new beds available and studio bed spaces accounted for 43%. The supply of studio rooms has increased by 106% since 2014.
“Cushman & Wakefield continues to be concerned that much studio development has been driven by land cost rather than true student demand, and there is clear evidence that a number of developments are experiencing occupancy issues,” the report says.
Elsewhere in Europe, Staytoo announced that it had sold 1,000 apartments in Germany to Chicago-based investment firm Harrison Street Estate Capital.
The properties are located in Berlin, Bonn, Leipzig, Nuremberg and Kaiserslautern, which won the award for ‘Best co-revolution’ the Class Conference in Lisbon in November 2017.
Staytoo is planning to roll out the development cycle of student housing two other markets – Spain and Portugal – where it sees international students driving demand.
The Cushman and Wakefield report also points out that 150,000 bed spaces are in the purpose-built student accommodation planning pipeline in the UK, with most located in Birmingham, Liverpool, Glasgow, London and Sheffield.
“While a proportion of the pipeline may never be built, the success of any proposed scheme will be in aligning room types with actual demand and affordability,” it suggests.
Ed Naylor, student accommodation manager at Liverpool John Moores University told The PIE that he welcomed the increase in private sector investment as it increased choice for students.
“International students are just as varied as home students and although some do prefer studios, many others choose the cheaper cluster flats and others can only afford shared houses – so having a diverse and good quality housing sector is helpful to us,” he said.
A spokesperson for the University of Glasgow voiced similar views.
“We recognise that there are many benefits in students being able to choose from a number of options in terms of accommodation and welcome the diversity of student accommodation provided by the private sector,” they added.
