INVESTORS SPEND BILLIONS ON LUXURY STUDENT FLATS

Published: 29/04/2016

Investors including Russian billionaires are splashing out on UK student accommodation, pushing sales to a record £3.3 billion in the last three months. Around 38,000 beds have sold so far in 2015.

Among the top transactions was a £532 million deal by LetterOne Treasury Services, an investment vehicle backed by Russian oligarch Mikhail Fridman, to buy five central London sites and Canada Pension Plan Investment Board’s (CPPIB) purchase of a £1.1bn collection with buildings across 17 of the largest university towns and cities in Britain.

At the time of the purchase previous this month, CPPIB said it expected to see “continued demand for well-located and well-managed student houses”. The reputation of the student housing market has grown progressively, attracting investors that have typically invested in more conventional properties, such as offices.

Rents can frequently be as much as £419 a week in some London student improvements, and many are luxurious, with gyms, cinemas, music rooms and bars.

A number of landlords are looking to capitalise on the rising demand for the sector. Knightsbridge Student Housing is expected to realize £500 million from the sale of a 5,867 bed collection. Europa Capital and the US investor Greystar are understood to be among the bidders.