UK Market

In the UK Crosslane purpose-built student accommodation (PBSA) developments are predominantly focussed on Russell Group university cities, outside London, where returns are most favourable. Cities are prioritised where demand-supply imbalance is greatest and where there is more than one higher educational institution, with site locations being close to university campus as well as city centres, providing convenience and attractive amenities and lifestyle. Sites are typically 130-450 beds in size to achieve operational efficiencies.

The UK has the highest number of top globally performing Universities in Europe

Over the last 20 years the numbers of students applying to UK Universities has grown from just over 400,000 per year to around 700,000 per year with an increasing number of overseas students attracted by the globally highly regarded & respected English speaking education system.

Total student numbers in the UK are around 2.3 million – the highest in Europe as a proportion of total country population figures.

University owned Halls of Residence and Purpose Built Student Accommodation accounts for less than 40% of all student housing across all major University cities in the UK with some locations less than 25% highlighting the growing demand and lack in supply of somewhere for students to live whilst they study in the UK.

Crosslane seek to capitalize on the opportunity of the supply and demand imbalance and in addition to the property portfolio of student accommodation already developed, have ambitious plans to continue to develop high quality purpose-built student accommodation across the UK, with a target to deliver 10,000 beds in the next 5 years.

1 Source: Cushman & Wakefield UK Student Accommodation report 2015/16 2Source: Savills — Spotlight UK Student Housing 2016
3 Source: HESA figures 2015/16
4 Source: EY-UK Purpose Built Student Accommodation
5 Source: Knight Frank Student Market Review 201
Sector investment
In 2015 the purpose-built student accommodation (PBSA) investment market experienced a record year with £5.1bn of
transactions, of which 37% by value and 46% by bed number were acquired by institutions.
 
Private Equity invested over £2.13bn in 2015 on 41 assets. The share of the investment market taken by private equity
has fallen every year since 2013. This is due to the increase in Institutional interest and public fund

PBSA market

During  the  last  decade,  the  PBSA  market  in  the  UK  has  become  an  attractive  proposition  both  from  domestic  and  international  investors.  This  is  demonstrated  by  the resilience the asset class had through the 2008/09 downturn and subsequent transition from an alternative to   an   institutional   asset   class.  

In   2015,   the   sector   experienced record investment volumes, with c.75,000 PBSA beds transacting at a total value of c. £5.1bn (double the  volume  seen  in  2014).  Portfolio  trades  led  the  rise,  as new entrants looked to instantly establish themselves in   the   market   and   existing   operators   consolidated   their positions

Market key players
The Top 10 private operators in terms of bed spaces account for 62% of total bed spaces. In addition to the number of beds
already developed by CPG, given the scale of the future pipeline of over 3,300 beds, by 2019 CPG could become one of the
major operators in the private sector market with a strategic investment partner. Some of the largest companies in the sector
as at January 2017 are:
 
UNITE – 4.5% earnings yield and NAV growth, 3.8% rental growth expected in 2017 with 49,000 beds UK wide.
Liberty Living – 19,000 beds across 19 locations in the UK. Acquired by CPPIB in Mar 2015.
Prodigy Living – part of Vero Group which has 23,500 beds across 54 locations.
CRM – Largest independent provider with over 13,000 beds in its portfolio.
Source: Cushman & Wakefield UK Student Accommodation report 2015/16
 
Yields (2001 to Q1 2016)
Source: Savills Spotlight UK Student Housing 2016