Where should I invest in student accommodation? - Opulent Invest

Where should I invest in student accommodation?.

Where should I invest in student accommodation?.

March 8, 2022

Purpose-Built Student Accommodation (PBSA) is one of the most popular alternative investments on the market. Occupancy rates bounced back strongly in 2021, and all indications are that they will keep improving in the future.

Demand from UK-based and foreign students is increasing years on year, and the number of students beds available in the UK’s university towns and cities is not adequate to supply the market. These factors account for the 95% average occupancy rate recorded by the latest Student Accommodation Survey from Knight Frank and UCAS.

This is in spite of the fact that Brexit and the following economic uncertainty reduced the number of students from the EU significantly. This fall was met by a rise in domestic applications of 5% this year, and should also be offset by the government’s stated goal to increase the number of international students from across the world to 600,000 annually by 2030.

It is these underlying factors that have created a resilient sector, and make PBSA such an attractive investment option for investors from around the world – and contributed to the growth of a sector predicted to be worth as much as £72bn by the end of the year.

So, the question becomes: where should you invest in student accommodation? The biggest cities such as London and Manchester are seeing more PBSA built than ever before, and even though there will still be a shortfall in those places, it has become increasingly clear that investors might be able to achieve better value by looking at other destinations.

One such place that is attracting an increasing amount of attention from investors is Stoke-on-Trent, a West Midlands city that is home to two large, popular and highly-regarded universities – the University of Staffordshire (approx. 13,000 students) and Keele University (approx. 10,000 students).

Both universities occupy prime sites within easy reach of the universities and city centre. Likewise, both are undertaking expansions that will increase their capacity and attractiveness – and both have nowhere near enough student accommodation supply to meet demand.

The University of Staffordshire prides itself on training graduates who are among the most employable in the UK, and is moving towards the completion of its 2030 Campus Masterplan. This is overhauling the services and facilities on offer to make the university more competitive and attractive in the years to come.

Additions to the campus include a £40m physical and virtual business hub called the Catalyst, a £5.8m Centre for Health Innovation, a £4.4m Nursery and Forest School and a £20m Innovation Enterprise Zone. By expanding the range and quality of education it offers, the University of Staffordshire should attract an even greater number of students in the future as it continues to grow.

Keele University is among the top 10 in the UK for student experience and satisfaction, and is developing a similar Masterplan which will serve its ambition to reach 20,000 students over a long-term period. This will be done through the establishment of a new engineering faculty and student growth at the existing health, humanities and sciences faculties.

Overall, the Masterplan will cover approximately 100 hectares, of which around half will be allocated to science and innovation, and half to academic uses. This will in effect double the size of the university, both physically and in terms of student numbers. It is clear to see that Keele University is on the verge of a huge transformation, and that will bring with it accompanying challenges – including the need to house twice as many students as before.

In addition to their growth plans, the universities occupy locations close to the centre of Stoke which make them even more attractive to potential students. Stoke itself is a modern city that includes everything a student could want, from cultural attractions to nightlife, bars and restaurants. It is also on the mainline between Manchester, Birmingham and London, with many trains operating every day providing convenient access to everything that these cities have on offer.

Between the two universities, the need for PBSA is already strong and about to become much more urgent. This can only be met through the private sector, with the best apartments located close to the universities and Stoke city centre likely to be in high demand.

Invest in Stoke student accommodation

If you are looking to invest in PBSA in Stoke, we are pleased to present two opportunities that could both make a strong addition to your investment portfolio.

Poulson House

Poulson House in Stoke is a completed and fully-operational student accommodation development situated a mere nine-minute walk from the University of Staffordshire and a 25-minute drive away from Keele University. This represents an attractive and immediate income for investors.

Poulson House is managed by Greenpad, the university student union’s own management company. This is their sole management property and ensures a high level of focus and maximum occupancy each year

  • Completed student accommodation
  • 100% occupied [Please confirm before publishing]
  • Prices from £62,950
  • True live yield of 7%
  • The only university-approved PBSA studios in Stoke
  • Managed by Staffordshire University’s student union
  • Rental assurances available [Please confirm before publishing]

Find out more about Poulson House by clicking here.

One London Road

One London Road is located in the picturesque town of Newcastle-Under-Lyme and offers an impressive 10% net return assured for 3 years. The building features great facilities such as a rooftop terrace and BBQ area, a state of the art gymnasium and various common lounges featuring table football and other activities to keep the students busy.

The building lies 10 minutes away from the Keele University by bus, and with the University being rural, this is one of its closest and most convenient purpose-built student accommodation developments.

Built by a reputable developer with extensive experience in this area, One London Road is managed by the leading student management company Urban Student Living who look after all of the management on behalf of our investors.

  • Prices from £79,999
  • 5% net return for three years
  • 250 year leasehold from completion date
  • £350 per annum ground rent
  • £1350 per annum service charge and management (not applicable during rental assurance)

Find out more about One London Road by clicking here.

Author

Sanjit Dhanjal.

sanjit@opulentinvest.com