Student accommodation 'is a good investment'

by Sarah Ashcroft

Landlords looking for a reliable investment with good returns as a way to make money during the current economic climate should consider branching out into student accommodation.

This is according to Peter Mindenhall, a researcher from property-based investment strategist, who said the sector is likely to remain lucrative as long as intake at universities is working well.

Mr Mindenhall went on to note an ongoing shortage of purpose-built developments for individuals attending further education, while the concept of injecting money into this area has emerged only in the past few years.

In addition, he suggested that although reports would suggest there is a lack of new quality accommodation for students at present, figures highlighting the take-up of properties have not seen much fluctuation.

Furthermore, the expert claimed there may be less provision from private landlords currently due to changing rental accommodation regulations and the cost to renovate is becoming increasingly prohibitive.

His comments were made after Balfour Beatty announced it has been appointed the preferred bidder for the University of Edinburgh's £110 million Holyrood Postgraduate Student Accommodation and Outreach Centre initiative.

As part of the move, the company will invest 100 per cent of the required equity into the development, which is expected to reach financial close next spring.

Mr Mindenhall also suggested the simplicity of investing in this area is likely to have resulted in a rise in interest among property owners, while higher demand from students looking for better quality homes has also driven the industry.

He added: "[Student accommodation] is seen as an efficient way to invest money that is going to be able to give you constant returns with an element of surety about it because you have students coming back year after year.

"As long as the intake at the university is working well, then there is a captive market."

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Published on: September 4, 2012

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