2024-08-07-莱坊-UK_Student_Housing_Q2_2024_5页_621kb

报告摘要

UK Student Market Update Summary (Q2 2024)

Core Content

This document provides a comprehensive overview of the UK student property market in Q2 2024, highlighting key trends in investment, supply, demand, and policy developments. It emphasizes the strong investment activity, constrained development pipeline, and the impact of supply shortages on rental growth.

Main Investment Trends

Investment Activity:
- Investment in UK PBSA reached £1.7 billion in Q2 2024, the highest since 2022.
- The Cuscaden Peak Portfolio acquisition by Mapletree was the largest deal, valued at £964 million.
- Total H1 2024 investment reached £2.45 billion, significantly higher than the same period in 2023 (£1.1 billion) and 2022.
Key Deals in Q2:
- The Cuscaden Portfolio: Portfolio acquisition, multiple UK cities, £964m, Mapletree.
- Project Jade: Portfolio acquisition, Birmingham, Cardiff, Leicester, Liverpool, Nottingham and Sheffield, £167m, PGIM & Generation.
- Pavilion Court: Operational, London, £125m, Apollo.
- Avon Street: Forward / Joint Venture, Bristol, £85m, Corebridge Capital.
- 65 Fleet Street: Site Sale, London, £85m, Dominus.
Regional Investment:
- Regional PBSA investment has been dominant, with an average of £2.1 billion annually since 2019.
- London investment remains lower, averaging £570 million annually, due to limited supply and higher competition.

Supply and Demand Dynamics

Supply Shortages:
- Only 17,500 new PBSA beds will be added in the 2024/25 academic year, a marginal 0.6% increase from 2023.
- This is significantly below the pre-pandemic average of over 25,000 beds annually.
- The total PBSA pipeline is around 160,000 beds, with 22% under construction and 49% with full planning permission.
Rental Growth:
- Rental growth remains elevated at 7.6% across the UK in 2024.
- Studio rental growth in London reached 11.7%, compared to 9.0% across the UK.
- The imbalance between supply and demand is a key driver of rental growth.

Market Structure and Opportunities

Two-Tier Market:
- Since 2012, only 258,000 new PBSA beds have been added, accounting for 35% of total stock.
- 65% of existing PBSA stock was built before 2012, leading to a clear distinction between older and newer stock.
- Markets like Oxford have a high proportion of pre-2012 stock (83%) and university-operated schemes (84 out of 95), while Bristol and Edinburgh have lower pre-2012 stock (57% and 54% respectively).
Investment Opportunities:
- A flight to quality has made prime PBSA stock more competitive.
- Retrofitting secondary PBSA stock offers potential value creation, especially in areas with high supply-demand imbalances.

Economic and Policy Outlook

Economic Conditions:
- Inflation dropped to 2% in May, the first time in three years it has been within the Bank of England's target range.
- Financial markets anticipate two interest rate cuts of 0.25% by December 2024, which should boost transactional activity.
Policy Stability:
- The Migration Advisory Committee (MAC) concluded that there is no widespread abuse of the graduate visa system.
- The MAC report recommended maintaining the two-year graduate visa route, which supports international student demand.
- The newly-elected Labour Party has committed to securing the future of UK higher education, suggesting a policy environment that favors mergers and acquisitions over fiscal cuts.

Challenges and Headwinds

Development Constraints:
- The development pipeline is constrained due to rising build and site costs, skills and labor shortages, higher financing costs, and complex planning policies.
Financial Pressures on Universities:
- Domestic undergraduate tuition fees are frozen at £9,250 since 2017, but have fallen in real terms due to inflation.
- Current real value of fees for the 2023/24 cycle is estimated at £7,181 p/a.
- Projections suggest the real value will drop to around £6,155 p/a by 2030.
- 40% of universities are projected to be in deficit in 2023/24.

Conclusion

The UK student property market is experiencing strong investment activity, driven by large portfolio acquisitions and a more favorable economic backdrop. However, supply constraints and a two-tier market structure pose challenges and opportunities for investors. Policy stability, particularly around visa and education funding, is expected to support the sector's long-term growth.

Key Contacts

Oliver Knight: Head of Res Dev Research, +44 20 7861 5134, oliver.knight@knightfrank.com
Merelina Sykes: Joint Head of Student Property, +44 20 7861 5425, merelina.sykes@knightfrank.com
Lisa Attenborough: Head of Debt Advisory, +44 20 3909 6846, lisa.attenborough@knightfrank.com
Chris Benham: Partner, +44 2078 611 289, chris.benham@knightfrank.com
Katie O'Neill: Head of Student Property Research, +44 20 8176 9829, katie.oneill@knightfrank.com
Neil Armstrong: Joint Head of Student Property, +44 20 7861 5332, neil.armstrong@knightfrank.com
Emma Winning: Head of Equity Advisory, +44 20 7861 1509, emma.winning@knightfrank.com