Construction of student accommodation has continued to soar in Britain despite unhealthy forecasts for the construction sector in the wake of Brexit uncertainty as projects have become increasingly led by private developers instead of the universities themselves.
This privatised construction of student accommodation buildings is a strategy much approved of by investors, with Glenigan forecasting the niche sector of student accommodation construction to experience an increased workload in the coming years.
Part of that which is fuelling this subsector is the demand for student housing, after it has been revealed that for the 2018/19 academic year universities received 272,910 applications whereas for the 2019/2020 academic year universities received 275,520 applications.
In Guildford the developer, Future Generation, has appointed the contractor, McAleer and Rushe, to construct a new 533-bed student accommodation development at a cost of £102M, while in Leicester £200M has been sent on a scheme, organised by the university developer Equitix, to construct an accommodation development over the course of three years.
Meanwhile, in Nottingham, Unite have bought a site on Derby Road which is scheduled to be developed into a 620-bed development, at a cost of £48M, ready in in time for the 2022/23 academic year.
The Property Director at Unite, Nick Hayes stated: “This latest acquisition reflects our strategy of aligning our business with mid and high tariff Universities in cities where there is strong demand for affordable, high-quality student accommodation.”
While, according to Glenigan’s construction market research, the RG Group have laid plans to construct a 24-storey student development, containing more than 1,000 bedrooms, in London.
The Economics Director of Glenigan, Allan Wilén stated: “Student accommodation has become an important niche market for private sector developers. The development pipeline is strong and project starts are forecast to rise by six per cent this year.
“Looking further ahead, the number of student entrants to universities is projected to decline 4.5% over the four years to 2021/22, a trend that may temper the flow of investment into this market over the medium term.”
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