The student housing
pipeline is receiving a boost with the £1.4 billion acquisition by leading
developer and operator Unite, of rival Liberty Living.
The Competition and
Markets Authority has decided not to intervene in the deal, which should
complete next month and create a mega client in this sector.
Unite will build
6,000 student beds over the next three years and the deal will boost that
programme further with major developments in cities such as Bristol (Glenigan
Project ID: 19063717)
Richard Smith, chief
executive of Unite Students, said: “The enlarged group will be well positioned
to meet the growing need for affordable, high quality student accommodation in
university towns and cities where demand is strong.”
Unite already has a
swathe of other student accommodation schemes in the pipeline. These range from
a £5m extension to a student block in Manchester (Glenigan Project ID:
19285484) to the £200m development City Fringe Student Tower in London
(Glenigan Project ID: 18035339).
The new deal will
create a larger group and is expected to boost development opportunities and is
a reassuring move at a time when student numbers are expected to dip due to a
drop in the birth rate.
Another of the UK’s
leading student accommodation developers, Watkin Jones, is also planning
expansion.
The Welsh company,
which like Unite is listed on the stock exchange, completed six student
accommodation schemes containing 2,723 beds in the 12 months to September 30
2019. "We are pleased by the progress achieved by the Group in the last
twelve months,” said chief executive Richard Simpson.
The group focuses on
forward selling schemes and expects to deliver 3,500 beds a year up to 2024 and
Glenigan has identified a number of these student accommodation.
Proposals in Watkin
Jones’ development pipeline include a £38m scheme in Bedford for Cranfield
University (Project ID: 19379295) due to start next spring and the £25.8m
Steelworks House scheme in Sheffield.
Unite and Watkin
Jones tend to focus on larger student accommodation projects, but other
developers are pushing on with smaller schemes, such as Torsion.
Leeds-based Torsion
started work earlier this year on an £11.3m project to build 210-bed student
accommodation scheme in Coventry (Glenigan Project ID: 17342351) and plans to
begin construction on 403 student units in Lincoln next spring (Glenigan Project
ID: 19054711).
Other student
accommodation developers are also waiting until next year before starting
projects according to Glenigan’s research.
Construction should
start in the New Year on Danehurst’s £11.9m Harvest Road development, which
will provide beds for 166 students (Glenigan Project ID: 1825812). Maven
Capital is also expected to start building work early next year on a £12m
development to house 199 student beds at Portswood Road in Southampton (Project
ID: 16006301).
In Glenigan’s last
industry forecast published this summer, the value of student accommodation
construction projects starting on site was forecast to rise by 6% this year.
Glenigan’s next construction forecasts will be published in December.
