The student housing sector is showing positive signs with a number of projects moving through the pipeline and clients pledging major sums.
McAleer & Rushe has recently won the job to build a £100m student-led, mixed-use scheme in the City of London (pictured) for developer Dominus Real Estate (Project ID: 22369326). Construction work is scheduled to begin in April on the scheme known as 65 Crutched Friars.
London is proving a popular destination for developers of student housing. Alumno and Hurlington Capital have secured planning permission to build 316 student flats at Marshgate Lane in East London (Project ID: 18397804). Alumno expects work to start before the end of 2024.
Fusion Students and fellow developers Tri7 have lodged plans to convert a former Mecca Bingo building at Wood Green in London into 623 student bedrooms and 77 affordable homes (Project ID: 23390420). If the planning application is successful, work could begin this September.
Foreign funding boost
The student housing sector is benefitting from the Renters Reform Bill, which increase tax and regulatory changes and is expected to discourage smaller buy-to-let investors.
“An exodus of smaller landlords would increase rental levels and increase demand for purpose-built accommodation,” explains Glenigan economics director Allan Wilen.
Glenigan forecasts that the underlying value of student housing project starts – schemes valued at £100 million or below – will leap by 16% this year as conditions encourage investment.
Mr Wilen adds: “Overall student numbers have grown post-pandemic, increasing by 4.0% during 2022/23. While the number of UK students rose by 1.7%, the number of overseas students was 12.4% higher, as a sharp rise in non-EU students, particularly from China and India, outweighed a marked decline in EU students.
“The rise in overseas student numbers will be especially welcomed by purpose-built student accommodation developers, as international students are more likely to remain in purpose-built student halls throughout their studies.”
Provincial focus
Student accommodation schemes are also moving forward outside of London.
In Liverpool, McLaren Property and Aventicum Real Estate recently secured planning permission for a £140 million plan to turn two listed buildings into 759 student beds and 189 Build to Rent apartments (Project ID: 22157211). Construction should begin this August.
Fusion and Tri7 are also working together in Leeds and have submitted a detailed planning application for the £38.4 million Garnet Exchange development, which will provide 807 student flats (Project ID: 23304120)
Major pipelines
With a £2 billion programme of developments, Fusion is among a number of developers of student accommodation with major pipelines of work.
Other Fusion projects progressing through the system include plans for a £48.3 million development of 525 student rooms at Limehurst Avenue, Loughborough (Project ID: 23206341). Detailed plans have been submitted and, if approved, a start on construction is anticipated this September according to Glenigan’s market information.
Unite, another of the UK’s biggest student accommodation developers, has a £1.3 billion pipeline including a £569 million committed pipeline for projects in the cities in the Russell Group of leading universities.
Unite recently signed a joint venture with Newcastle University to build 2,000 beds at its Castle Leazes site (Project ID: 19376827). Glenigan’s construction industry research suggests work will start early next year.
Positive prospects
With the underlying value of student accommodation project starts forecast by Glenigan to increase by another 10% next year, this sector should provide steady workload for the next two years.
