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The UK Real Estate Digest: What next for student accommodation?

A first-class investment or time to drop out? Tom Sharman, our Head of Research & Strategy, digs into the detail.

But risks are emerging. Universities are increasingly reliant on overseas students and numbers are predicted to fall.

Office for Students (OFS) modelling suggests that, without mitigating action, and despite the announced unfreezing of the fees cap, almost three in four Higher Education institutions will be in deficit by the 2025/26 academic year.

What to expect in this edition of the UK Real Estate Digest

  • From a property investor’s perspective, there are still many potential customers within the student sector.
  • Over 2m full-time students are expected in the UK next year.
  • But for a sector used to growth, some institutions may have significantly fewer customers than they were budgeting for.
  • UCAS data shows acceptances from overseas students fell by 3% last year, to their lowest level for five years.
  • In the mainstream commercial sectors, values are broadly stable but investment remains weak.
  • Data from MSCI suggests industrial and retail parks values are expected to outperform.
  • In contrast, office values are continuing to lag behind with values off by 5.4% on average so far this year.

 

Issue 114 of the UK Real Estate Digest

Read the UK Real Estate Digest 2024.

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This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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