UK: H1 investment in the PBSA sector rose 245 per cent y-oy to £1.7 billon, according to new research from BNP Paribas.
Q2 – when £1.3 billion was invested saw a 256 per cent year-on-year increase.
Rebecca Shafran, alternatives markets research at BNP Paribas Real Estate, said: “Student accommodation really is the darling of the alternatives sector at the moment and is set to outweigh other living asset classes over the next 12 months. It offers a long-income play with strong operational performance and a track record which investors in the beds sector really value. We’re seeing shortfalls in stock across some key university cities alongside attractive pricing which can be tapped into.”
Andrew Screen, head of residential capital markets at BNP Paribas Real Estate, added: “There’s an unprecedented amount of capital targeting the UK living sector at the moment and student is the primary target. Investor funding allocations for PBSA have increased by c£5 billion in the last six months, with high demand for Build-to-Core and Value Add, mainly targeting London, prime regional cities, Russell Group and STEM university locations. We have also seen an increase in demand for 1st Gen refurbishment opportunities and expect to see Core portfolio transactions commencing towards the end of the year. Investors with allocations over £250 million are focused on multiple-development, programmatic joint ventures or larger development opportunities.”
