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News Release

London

Transactions in UK student accommodation rise 155% as finance becomes more readily available says JLL


LONDON, 3 April 2014 – Figures released today by JLL indicate  that quarter 1 (Q1) 2014 transactional investment in student accommodation has risen 155% when compared to the same period in 2013.

Total transactions in Q1 2014 amount to £415million, an increase partially driven by the availability of debt finance, as well as equity becoming more accessible to investors.

Key deals for the quarter include LaSalle Investment Management’s purchase of Victoria Hall, Wembley, the Campus Living Villages purchase of the Opal portfolio at £244million, Curlew Student Trust’s forward funding of three Watkin Jones developments for £63.5million and Henderson’s acquisition of Gallery Apartments, Glasgow, for £17.2million.

A number of money raising deals have also been struck this quarter, such as the £100million Unite share placing, the UPP £200million equity boost and the discussion around a potential extension of the GCP REIT. In addition to this, the Campus Living Villages purchase of the Opal portfolio was funded by a £210m bond from Legal & General Investment Management.

JLL predicts that activity will continue to remain high throughout the year, with circa £720million worth of student accommodation currently under offer and approximately £350million being marketed.

Philip Hillman, lead director, student housing at JLL said “It’s been a strong start to 2014 and we have witnessed a significant increase in investment from UK institutions, particularly for direct let properties. For example, LaSalle Investment Management acquired Victoria Hall, Wembley and Henderson acquired the Gallery Apartments, Glasgow.

“Student housing is increasingly benefiting from investment from institutions which have a growing appetite for the alternative investment asset classes. The growing transparency in accounting for direct let properties has gone a long way to provide comfort to institutions on the robustness of this tenancy type within student housing asset class.

“Student accommodation yields are forecast to harden at c.5.85% for direct lets in prime London, with an annual rental growth projection on 3-4%.”​