For the third year in a row UK universities have come out on top of the Times Higher Education global universities rankings. Oxford and Cambridge universities took first and second respectively, marking the third year that Oxford sits at the top of the list.
Before the recent domination there had been some concern that US universities were breaking away to form a somewhat central grouping, but the resurgence of UK universities as a whole has given reassurance to those who were initially concerned.
Concern had been expressed by those in the higher education sector that British universities and academics were falling behind, with investors also keeping tabs on the overall health of British universities.
Investment into the sector, including into Purpose Built Student Accommodation (PBSA) has been growing significantly and the Financial Times even went as far as to name it the hottest asset class on the market today. Rising demand, yield growth and low vacancy rates have meant that both individual and business investment has been exploding of late.
There was cause for celebration as the UK also sat third in the list of countries with the most universities among the 1,258 ranked globally. The US is first with 172, with Japan second on 103 and the UK third with 98.
The UK also has an impressive 29 universities in the global top 200. Their stock is rising and this is seeing more students applying as a result. The expectation from UCAS is an increase in applications for the next academic year beginning in September 2019.
With that in mind it’s hardly surprising that Savills were reporting that global investment into PBSA has jumped an enormous 87% in just five years thanks to these conditions. They cited the fact that in the UK only 27% of the student population can currently be accommodated, meaning an enormous deficit between demand and supply which is contributing to strong yields and rental yield growth.
Savills also reported that PBSA saw another record year in 2017, with US$17.5bn being invested across the world, a 4% increase year-on-year from 2016. Over half of this investment was concentrated in the UK, US and Europe, 51% or US$8.9bn, increasing from US$6.6bn the previous year.
With the UK offering some of the best universities in the world along with the US and Europe, the expectation is that this level of investment will only increase over the coming months and years as provision gets marginally better but still significantly outstripped by demand from increasing student populations.
As with much of property investment at the moment PBSA is seen as somewhat ‘Brexit-proof’ with many expressing feelings of optimism and confidence regardless of the result of negotiations between the EU and Britain. It’s not surprising given that, two years on from the vote; there has been little if any movement on student numbers and applications both from the UK and abroad.
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