As a new academic year approaches, the continuing growth in demand for student accommodation in Britain’s major cities is creating some significant opportunities for new construction work, reports Glenigan.
In the three months to June, student accommodation starts were worth £839 million, some 78% up on the period a year ago and equivalent to 8% of all housing starts.
The potential for new work in the sector was underlined last month when Unite Group, the FTSE 100 company that is the largest student landlord, raised £450 million from shareholders to invest in additional space.
A series of positive fundamentals are driving activity in the sector. Unite points to the UK’s globally recognised higher education sector, a housing shortage, and high demand for university places for 18-25-year-olds. As well as strong demand from international students, domestic demand is set to rise thanks to a 16% growth in the number of 18-year-olds in the UK by 2030.
Unite’s development pipeline has grown to a record £1.5 billion in what it says are ‘strong university markets’, including its first joint venture in the sector which it is doing with Newcastle University.
The newly raised funds will be used to acquire seven student housing units across Bristol, Cardiff, and Liverpool which need work. Unite is also committing to two new schemes, with planning consent, in Bristol and Glasgow with a development cost of around £200 million.
Meanwhile, the funds will also be used for two other student housing developments: a 444-bed, £170 million scheme in Southwark due to be ready for the 2027/28 academic year and another scheme in a ‘prime regional market’ with a development cost of around £110 million.
Glenigan data provides details on numerous student accommodation schemes of varying sizes across the country where work is set to get underway.
In Leeds, for example, detailed plans have been granted and work is set to get underway this autumn on a £34.24 million scheme of almost 200 student apartments at Kirkstall Road (pictured) where Brigade Central is the developer. The purpose-built scheme of up to ten storeys will involve over 6,500 sq m of space and work is set to run for 20 months (Project ID: 23351417).
Moving south to Southampton, work on an £11.85 million purpose-built scheme which includes a 5-6 storey building with nearly 250 bed spaces and another building with eight bed spaces is also due to get underway later this year. The project at 119 High Street is set to run for 13 months (Project ID: 23373781).
Meanwhile, in Exeter, work is due to start this autumn on a £15 million scheme in the city’s Longbrook Street which will provide accommodation for 97 students. The project involves a floor area of some 180 sq m and will run for 17 months (Project ID: 17200977).
Renovation schemes involving the conversion of existing business space into student accommodation space also offer opportunities for construction work.
In Manchester, detailed plans have been granted for an £80 million scheme involving the redevelopment of The Hotspur Press site to provide student accommodation in buildings of up to 37 storeys. The scheme could potentially start in the new year if delays due to an application for the building to be listed can be overcome (Project ID: 18270098).
On a smaller scale, detailed plans have been submitted for a £500,000 conversion of Burlington Arcade in Bournemouth to student halls of residence on a scheme that is set to start early in 2025 (Project ID: 16198869).
