CBRE: Tougher terms for student market
The boom in student accommodation in recent years is threatened by more restrictive planning regimes and funding uncertainty, according to new research.
CB Richard Ellis's Q3 2010 Student Accommodation Report says the sector has been resilient in the recession but the post-election age of austerity is likely to create new challenges.
CBRE said: "The ongoing uncertainty, along with more restrictive planning regimes in some cities may potentially affect the development pipeline, although the volume of students in the key university towns in the North West, including Manchester, Liverpool, Preston and Lancaster, remain robust. As such, solid opportunities remain where there is a clear demand and supply imbalance.
"Overall supply of good quality stock has remained largely muted in the North West over the last two years with relative inactivity due to the economic environment and high land prices. However, developers are once again seeking opportunities, particularly in areas considered low-risk where the supply and demand mismatch is considered to be overt."
Nick Mullins, director of valuation advisory and investment consulting at CBRE North West, added: "The opportunity to develop new accommodation in the North West is now certainly trickier. There are still, without doubt, solid opportunities, although to benefit from them it is becoming more crucial to work alongside the universities and local authorities.
"In Manchester, the key challenge for private sector developers is the tightening of development controls. However, with pressure on the universities to manage costs but with a continued need to improve existing accommodation to help maintain student numbers, there must be a role for the private sector to play in helping to deliver modern, high quality accommodation in partnership with the universities and local authorities. Approximately 50% of the total managed stock in Manchester is not up to modern standards and it is only a matter of time before the quality of the accommodation starts to become more of a defining factor in students decision-making on which university to attend."
