Purpose-built student accommodation is in high demand as the start of new college and university terms highlights the need for more housing for students.
Recent research from Savills has highlighted the scale of the housing shortage in the sector and the improving prospects for purpose-built student accommodation (PBSA).
It points to UCAS application figures suggesting the number of first-year undergraduates will rise from 618,000 in 2022/23 to 622,000 in the current year, 2023/24. With growth set to continue, UCAS is projecting the number of new university applications could reach 1 million by 2030.
With fewer large properties available from private landlords, students are increasingly looking to PBSA. Occupancy levels are at record highs which should support rental growth in the sector and drive strong investment returns over coming years.
The sharp rise in building costs has put pressure on many new PSBA schemes in recent years. But with tender price inflation forecast to fall back to 2–3% pa this year and next, Savills says this ‘may bring some confidence and increased viability back to the development of new PBSA stock.’ This, in turn, bodes well for new construction contracts in the sector.
As it is, Glenigan data highlights numerous construction work opportunities on PBSA schemes of widely varying sizes where work is set to get underway in the months ahead. Projects to house growing student numbers in big cities have particular momentum.
In Manchester, for example, detailed plans were approved this summer for a 14-storey PBSA scheme at The River Medlock site in the city’s Cambridge Street which will also involve a food hall on the ground floor. The project, which is being developed by Vita Group, is at the pre-tender stage with work set to start in the spring of next year (Project ID: 23069140).
Moving south to Nottingham, detailed plans have been granted and work is due to start this autumn on a £132 million project for clients Balia and Olympian Homes at the Forest Mill Site (pictured). It involves some 344 student accommodation flats with leisure and retail facilities along with nearly 70 residential apartments (Project ID: 22071986).
Some enterprising renovation schemes are also being undertaken to create new accommodation for students. In Coventry, detailed plans have been granted for a £28.24 million conversion of office space in the city’s Whitefriars Street to create student accommodation. The project is at the pre-tender stage with work due to start next spring (Project ID: 23066384).
The strong demand for student housing in London is inevitably a spur to schemes in the sector in the capital. Plans have been unveiled and a public consultation is underway on a £27.3 million project to convert a property, Chatelain House in Southwark, into student accommodation and apartments. The developer, Fabrix Capital, is expected to file a planning application by the end of this year and work could start in spring 2024 (Project ID: 19017417)
The medium-term PBSA work pipeline also offers some significant prospects for new work contracts. For example, the University of Manchester is currently seeking a development partner for its £100 million Fallowfield Campus Redevelopment which will involve the construction of a 3,300-bed student accommodation scheme. Work on the project, designed by Sheppard Robson, is pencilled in to start in summer 2024 and run for five years (Project ID: 23180716).
