What Is PBSA, Or Purpose-built Student Accommodation?
Purpose-built student accommodation differs from typical forms of student housing in that it is developed and built solely for the use of university students by private developers. It is an alternative for students who are unable to live in university halls of residence. To put it simply, it is higher-quality housing, rentals that include bills, a variety of lease durations, has improved internet connection, professional management, and security.
What Makes Purpose-built Student Housing An Option For Investment Now?
The student housing sector has seen a lot of activity in recent years and is expanding at an astonishing rate. Making it one of the most viable, promising, and profitable investment opportunities in housing Therefore, showing indications of this market becoming much more vibrant in 2020 and beyond.
There is an increasing trend that is growing as huge companies seek to develop international student housing brands with global investor’s appetites growing as institutions seek to diversify their portfolios beyond the UK and US. This phenomenon serves as an example of how they are seeking opportunity and investment in real assets to do so.
With the continued growth in demand for PBSA and students more prepared to pay higher rent for boutique housing, it is apparent that demand for student housing has shifted and PBSA is becoming more essential. With each passing academic year, students demonstrate that they are willing to pay more for a higher level of service in conjunction with their housing. When compared to the expected luxury like double beds, private bathrooms, superfast Wi-Fi, and all-inclusive bills, price is virtually a minor issue.
The UK student accommodation sector has witnessed a high amount of activity of investment in 2015, with £3.8 billion invested in the first six months, 2.1 times the entire amount in 2014. Large portfolio trades have dominated this activity, with foreign equities accounting for the bulk of it. The sector’s continuing yearly rental increase, as well as the expected rise in student numbers, continues to draw foreign investors.
Increasing Demand Means Increasing Profit
Foreign students are increasing in numbers and are putting immense pressure on the availability of affordable student housing.
They are also a significant source of income for colleges, and providing students with secure and safe housing near the university or college campus is a major concern for educational institutions. PBSA caters to students’ requirements and desires significantly better than other traditional forms of lodging, and students are more than happy to pay for the added convenience and quality. More than half of students are looking for high-quality housing near their main university campus.
It is quite convincing that there is still a large demand for student accommodation in the UK, particularly from the international student sector, where higher rental yields are possible.
The PBSA’s product line is expanding. Studio apartments with kitchenettes, which are priced at a higher monthly rate, may be available for students. For a lower cost, students may rent bedrooms and share shared cooking and living facilities with two to eight people. Successful PBSA projects will include a variety of bedroom types to meet a variety of student budgets.