Student stock remains profitable, says CBRE
PROPERTY consultancy CB Richard Ellis has produced a new report arguing that the outlook for the student accommodation sector remains positive, despite outperforming the market for the past five years.
It said that although post-election cuts were likely to create some challenges and that planning uncertainty could restrict the development pipeline, the volume of students in key university towns including Manchester, Liverpool, Preston and Lancaster, remains robust. As such, it argues that “solid opportunities remain where there is a clear demand and supply imbalance”.
Nick Mullins, director of CBRE North West’s valuation advisory division, said: “The opportunity to develop new accommodation in the North West is now certainly trickier. There are still, without doubt, solid opportunities, although to benefit from them it is becoming more crucial to work alongside the universities and local authorities.
“In Manchester, the key challenge for private sector developers is the tightening of development controls. However, with pressure on the universities to manage costs but with a continued need to improve existing accommodation to help maintain student numbers, there must be a role for the private sector to play in helping to deliver modern, high quality accommodation in partnership with the universities and local authorities.”
He said that 50 per cent of the total managed stock in Manchester is not up to modern standards and argued that it was “only a matter of time” before the quality of the accommodation becomes a key factor when students decide where they wish to live.
