Birmingham’s student housing market is coming of age, with a record number of student beds in the development pipeline and major assets changing hands.

According to research by CBRE, the city has granted planning permission for more than 3,200 new student beds across 24 developments, ranging in size from 33 – 625 beds.

Furthermore, 2016 has kicked off with two deals in the city – Salt Holdings’ £11m sale of The Pavilion, Five Ways, to a private buyer and Arlington Investors’ acquisition of Sanctuary Students’ 656 bed campus on Bagot Street, Aston, and adjacent development site with consent for 534 beds.

Aston University’s Student Village is currently on the market with a £200m price tag and is reported to have attracted widespread interest.

Rosie Young, Associate Director in CBRE’s Specialist Markets team, Birmingham
Strong investment volumes during 2015 and into 2016, together with a robust development pipeline, demonstrate that student housing is now a maturing asset class in this city.

We are already witnessing this trend in Birmingham with the sales of The Pavillon and Bagot Street.

All eyes are now on Aston Student Village, a much bigger beast with 3,000 beds which is likely to capture the attention of some of the bigger investment houses and funds. This sale will also provide clarity on where yields for large single regional assets are headed.
Rosie Young, Associate Director in CBRE’s Specialist Markets team, Birmingham

CBRE’s ‘UK Student Accommodation’ report shows that more than £5.5billion of investments changed hands in 2015, compared to £2.2bn in 2014, making student housing a mainstream investment option.

The market has been dominated by large portfolio sales, but CBRE predicts that this will change in 2016, with more single assets trading.

Yields climbed in 2015, returning to their 2007 levels. Prime regional assets now achieve 5.50 per cent, with superprime sites at 5.15 per cent.

CBRE predicts that values will be maintained, with a range of investors chasing a shrinking pool of quality stock.