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The latest big deals in the student accommodation sector

The latest big deals in the student accommodation sector

UK Purpose-Built Student Accommodation (PBSA) is one of the most vibrant investment markets in the world, as demonstrated by the latest big deals in the sector.

Investec, an international banking and wealth management group, is supporting US property developer CA Venture’s first investment in the UK with a £64m loan. This transaction represents Investec’s biggest investment into PBSA so far, with the bank saying that the future outlook for this type of investment looks promising.

Shivani Goolab, a member of Investec’s property team, said: “There remain significant pockets of the UK where there is a chronic undersupply of student beds, a trend we expect to continue being supported by favourable economic factors including a weak pound and low interest rates.

“At the same time, the long-term, visible income streams and covenant strength offered is extremely appealing to institutional investors.”

This joint-venture investment will be focussed on the Scottish market and include purchases in both Edinburgh and Glasgow, reflecting confidence in the market. The developments were chosen to appeal to students from a range of universities and are to be built in areas where there is currently a lack of accommodation.

The other big financial news from the PBSA sector concerns the upcoming Initial Public Offering (IPO) of iQ Student Accommodation which shares in one of the UK’s largest student housing providers will be available to institutional and private investors.

Operated by Goldman Sachs and the Wellcome Trust, it is likely that this IPO will attract significant interest thanks to the growing international interest in PBSA.

Whilst this move is still in its early stages, it is anticipated that a successful IPO could value the company at approximately £3.5bn – highlighting the value of investing in student accommodation.

It is true that much investment in the sector comes from enormous funds and institutions, but it is also possible to invest as a private individual and reap the rewards on offer. If you are looking to diversify your buy to let portfolio – or build a new one – get in touch today and find out about our latest high-yielding student investment opportunities.