Growing investment in student housing

Huw Oxburgh
Authored by Huw Oxburgh
Posted Tuesday, November 26, 2013 - 11:18am

A new range of luxury student apartments in Exeter has sold out in less than seven weeks due to an unprecedented demand from investors

Private investors from both the UK and overseas have bought into the £17 million scheme on Longbrook Street in Exeter city centre guaranteeing them a potion of the rental costs on the properties.

 The main contractor Create Construction, has begun work on the site and expect  the project  to  be completed for the 2014/15 student intake

Vita Student at Portland House is  just off the high street in Exeter and is a short walk to the main university campus. It is being refurbished from the current building and will see  161 luxury studios and two-bedroom apartments put in place.

The first wave of students are due to move in next September and will benefit from fitted kitchens, en-suite bathrooms and a space-saving foldable double bed with integrated sofa.

The apartments also include free high-speed 100MB broadband, Wi-Fi and a flat screen smart TV.

The growing student body can be attributed to The University of Exeter rising rapidly in the UK league tables culminating in it being named as The Sunday Times University of the Year in 2013. Student numbers have recently reach more than 19,000, with 25% from overseas.

Investment opportunities in the student property market have been increasingly sought after in recent years and global property consultancy Knight Frank’s 2014 report on the sector shows that total returns from student accommodation have outperformed all other property asset classes since 2011.

The report also predicts this trend will continue well into next year thanks to a maturing market and increasing student demand.

Exeter was chosen as the location for a luxury student scheme due to the academic reputation of the university and increasing student population which has been boosted by an influx of overseas students.

COO of Vita Ventures, Mark Oakes, said: “Exeter was chosen as a location for a Vita Student project due to the severe undersupply of suitable accommodation in the city. The academic excellence of the University means that the city is very attractive to investors because the student population will continue to grow, further increasing the need for accommodation.

“The speed at which our development has sold proves that our investment model is successfully catering for the market demand for student property.”

One of the investors in the scheme, Jeff Elder commented: “After examining the company and the student property sector I realised that the yields that can be achieved are stronger than any other property group – and indeed any savings group at the moment. Vita Student’s luxury proposition stacked up well with my market research and the assured 7% rental return for five years also put my mind at rest that my money would be working hard for me.

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