The student property investment sector has seen exponential growth over the past decade, outperforming other asset classes because of its counter-cyclical nature in the economic downturn.
The property consultancy Jones Lang LaSalle recently released a report on the emergence of student property as a mainstream global asset class, stating that student accommodation investment and transactions in the UK will have exceeded $3 billion.
The low-risk and resilient nature of student property has resulted in the involvement of lenders looking for ways to get a safe foothold into the real estate market. Earlier in the year, Legal and General loaned £121 million to the student housing company UNITE. CBRE reported that £800 million was invested into student property in the first half of 2012, almost doubling the amount invested the previous year.
Ed Hammond from the Financial Times commented that ‘The student housing sector has ballooned from a fringe investment 10 years ago to a global market worth $200bn today.’ Student property has carved itself a worthy place in the mainstream global property market, becoming the UK’s top asset class for the 2nd year running.
Philip Hillman from JLL echoes this flight of student investment to the mainstream property market in his comment that ‘Not so long ago, investors looked at student housing as an alternative property type. It is hard to justify that now, as it is becoming a must-have investment for most large funds’.
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