There appears to be a growing consensus north of Hadrian’s Wall that property investment in Scotland has been, and continues to, slow down post-Brexit. Despite the drop-off in interest in residential property there does seem to be one asset class which is flourishing in this environment, Purpose Built Student Accommodation (PBSA).
Universities across the country are reportedly looking to pour hundreds of millions of pounds into facilities across their sites in order to compete with rapidly expanding competitors in England. The investments are set to come in learning facilities, campus amenities, and campus expansions. Further to this there are a number of institutions looking to invest significantly, or to attract significant investment, into accommodation for a quickly growing student alumni.
To name but a few notable investments currently underway: the University of Glasgow is pouring in £550m, the University of the West of Scotland is investing £80m and Strathclyde University is looking at investing £33m.
The investments are aimed at benefiting the campus, students at the university and the wider community at large.
The UWS is already working with development partner HFD Group and the local authority South Lanarkshire Council and is investing £80m in a new 235,000 sqft campus two miles up the road from its current site in Hamilton.
These investments are also aimed at tempting private business into the area in order to develop PBSA which will complement the developments they are currently undertaking in order to provide the best possible student experience.
UWS’s director of strategic planning and development Marcus Ross, speaking to Property Week, said: “If universities don’t modernise and update their estate, then students will be coming to learn in an environment that is rather historical compared with where they’ve come from. Universities don’t have a God-given right to exist. If you don’t move forward and modernise there’s nothing to say that you will be here tomorrow. Folks are alive to that.”
With the rocketing popularity in privately managed student accommodation, many commentators are noticing that universities are becoming much savvier to the competitive marketplace they are now operating in. They’re aware that premium living spaces within convenient distances of their campus’ are likely to attract more students and increase their revenue flow.
PBSA landlords are not only earning high yields in a profitable asset class but they’re now becoming in-demand, too. As evidenced in the Glasgow, UWS and other projects, the universities are often embarking on joint ventures, selling off existing stock or offering financial incentives for private developers to bring premium accommodation.
With those already in the asset class likely to have room for further investment, it seems now more than ever that they can make the most of universities who are more than willing to attract them. For those wondering whether to enter the market, there is now an abundance of fairly good value investments in the resale market which offer much more cost-effective opportunities than residential investment.
Regardless of other factors, PBSA landlords can be reassured that for some time to come there will be a demand and a willingness from universities that will allow them to flourish.
Are you interested in PBSA in Scotland? Click here to look at our available properties.