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£10 million deal reached in Manchester for new accommodation

£10 million deal reached in Manchester for new accommodation

Despite some concerns that the amount of student accommodation in city centres is creating an issue of oversupply, there has recently been a big money deal agreed in Manchester this week for a block of student apartments that will now be redeveloped.

Some communities have been expressing concern to planning committees and council representatives that student accommodation was becoming overwhelming, but there has been growing evidence that in fact there simply isn’t enough to supply the demand from a booming student market.

In Manchester especially, where there are three popular universities with an excellent reputation, there are more students than ever seeking the Manchester student lifestyle.

With the end of the academic year looming in May and June for the city’s main universities, eyes will already be on the new students who will be coming to the city for the first time in September. The university cycle is a process that works about 12 months in advance and those looking for the perfect accommodation will likely already have the wheels in motion for where they’re going to live come September.

Given this environment it is no surprise that two student accommodation sites in Manchester have been sold in a deal worth a massive £10.8m. Moss Court is a four-storey block of 108 beds with parking and is located at the university campus in the Fallowfield area of South Manchester. City Edge, meanwhile, comprises 69 beds across three buildings near the Birley Fields campus.

The Manchester-based lead surveyor for student accommodation, Ian Scott, said in an interview with Business Daily: “This transaction continues to show the levels of demand and relatively aggressive pricing within the Manchester student accommodation market. The Manchester market continues to suffer from an under-supply of high quality new accommodation, especially within key university locations outside of the city centre”.

The comments echo the beliefs of many of the developers, planning officials and senior staff at universities that demand is almost certain to continue to grow for purpose built student accommodation in the coming years as first year students seek out the best value for their money. Cities like Manchester, Liverpool, Leeds, York and Newcastle are all in similar positions and the need for these kinds of developments is unlikely to wane.

It comes as good news for student accommodation investors as yet more proof that the popularity in the sector is a result of solid foundations based on large demand. Investments have been solid and yields as well as tenancy rates have been high for some time now. Those looking to potential investments post-Brexit should have renewed confidence that expanding their student portfolio in the UK makes good financial sense.

Many have argued that the problem with restricting student development is that students will simply seek out private rentals in the surrounding area which restricts access for families and young professionals. On the whole, private student accommodation actually benefits the local housing market in keeping housing stock available for families.

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