The UK’s student accommodation sector is still booming according to Knight Frank, despite Brexit creating uncertainty over the future of foreign students in the country.
Knight Frank’s Student Property team forecasts that in excess of 29,000 additional purpose-built student beds will be delivered next year – bringing the UK’s total to over 600,000.
The agency says North American and Asian institutional investors will continue to dominate the UK purpose built student accommodation market in 2019, with the strongest appetite for acquisitions coming from the United States, Singapore and Hong Kong.
“We predict that there will be in excess of 29,000 additional purpose built student beds delivered next year, that’s similar to the population of Gibraltar. This uptick in delivery is a very significant contribution to the UK’s housing shortage, helping to ease the pressure on existing housing stock” claims James Pullan, global head of student property at Knight Frank.
“Despite Brexit, global investors continue to acquire PBSA assets in the UK, fundamentally underpinned by the UK’s world renowned higher education system. The asset class offers a stable income stream, with strong year-on-year rental growth prospects. When compared to more mature asset classes, such as the offices sector, PBSA is standing out” he says.
Next year, Knight Frank is predicting 2.0 per cent rental growth in the student market.