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CBRE Student Accommodation Index shows increase in capital values

Student Accommodation continues to gather momentum amongst investors, with capital values increasing 6.5% year on year (to September 2018) according to CBRE’s newly launched Student Accommodation Index. This is up from the 4.5% recorded in the previous year (to September 2017).

On a gross and net basis, rents rose 3.0% and 3.4% respectively. At the national level annual total returns were 12.3% for the year to September 2018. The index is disaggregated into ‘Central London’ and ‘Regional’ geographies, the latter being further split into Super Prime, Prime, and Secondary.

Student Accommodation in Central London outperformed Regional by some margin. Driven by capital value growth of 12.4%, Central London Student Accommodation annual total returns reached 17.5% for the year to September 2018, compared with 14.2% for the previous 12 months. Regional Student Accommodation annual total returns to September 2018 were 10.5%, with capital growth of 4.5%.

Large Student Accommodation properties (500+ beds) slightly outperformed small (less than 250 beds) and medium (250-500 beds) properties for the year to September 2018. Capital values for large assets rose 7.2% pushing total returns to 12.9%. Capital growth in small (5.8%) and medium (6.2%) Student Accommodation properties resulted in total returns of 11.6% and 12.2% respectively.

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