University towns and cities across the North West are on the cusp of saturation for student accommodation with only occasional gaps in supply, according to Jo Winchester, head of student housing at CB Richard Ellis.
Winchester said that although there are ten banking teams still lending to student developments close analysis of supply and demand in the region highlights few decent opportunities.
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In Lancaster, there are 10,120 full-time students at the University of Lancaster and another 6,690 studying at the University of Cumbria. The number of full-time students has risen by 30% over the past ten years. The student housing market in Lancaster is constrained by a strict town planning regime due to the heritage value of the historic Lancashire capital, low rents and a shortage of sites.
There are an estimated 1,668 students living in private rented houses who could be accommodated in more modern halls provided by developers, according to CBRE, but this effectively signals saturation point.
Similarly, Liverpool's student housing boom of recent years is slowing to a standstill, according to Winchester. The tender invitation by Liverpool University for a developer to acquire the Carnatic Halls site in Mossley Hill and relocate students to new accommodation in the city centre had not been followed through to development. This was a sign the market was nervous about saturation and competing with existing private halls directly let by landlords outside of university agreements.
In Manchester, by contrast, students are undersupplied and CBRE predicts the development pipeline is "ready to go again". Manchester University's recent invitation to tender to build 2,000 beds on Sackville Street on former Umist land is a "genuine opportunity" for developers.
CBRE's 'headroom analysis' for Manchester showed 27,195 students housed in the private rented sector out of a total of 78,670 students attending Manchester University, Manchester Metropolitan University and Salford University.
Gavin Duncan, director of specialist student housing provider Opal Property Group, which has 10% of the student market in the UK, forecast annualised rental growth of between 3% and 5% over the next few years.
The standard of specification of student accommodation blocks was increasing all the time, Duncan added, with gyms, swimming pools, conference facilities and greener buildings now more common.
Paul Morris, director of facilities management at the University of Central Lancashire in Preston, said higher education was grappling with decisions around charging higher tuition fees. Setting the maximum £9,000 a year fee was a gamble as to whether all the places would be filled next year. Morris said the picture around student numbers would be clearer in 12 months' time which could then provide greater confidence to developers. Morris said there are currently 16 student housing schemes with planning consent in Preston, potentially providing 2,000 beds. However, on site activity was quiet. No new schemes have been completed in Preston since August 2008.
Place North West's Student Accommodation Forum was sponsored by Sheppard Robson, Rider Levett Bucknall, Hill Dickinson and CB Richard Ellis.
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