Almost £575m was invested in the UK purpose-built student accommodation (PBSA) market in the final quarter of 2024, taking annual investment to £3.87bn, according to new research published by Knight Frank.
The company said annual investment rose 14% in 2024, with year-on-year volumes rising from £3.39bn in 2023.
While a pick-up in investment demonstrates the attractiveness of the PBSA market, volumes were less than anticipated in the fourth quarter.
Merelina Sykes, joint head of student property at Knight Frank, said: “Deal times for stabilised assets are taking longer because of building safety regulations, which has pushed some transactions into early 2025. That said, overall activity was still robust.” According to Knight Frank, 66 deals completed in 2024, putting the year comfortably above the five year average of 57 transactions.
“With a lack of standing stock available in 2024, the year’s transaction landscape was defined by a particularly liquid land market. Nearly 50% of deals completing in the fourth quarter were development sites, capping a record year for student land sales. Overall, 22 development site sales were completed over the course of the year, accounting for a third of deal volumes.”
Investment momentum looks set to build in the year ahead.
Sykes noted: “Our team are tracking £1.3bn of transactions currently under offer. The majority of deals under offer are for stabilised or portfolio deals, reflecting the opportunity investors see in upgrading and repositioning existing stock.”
Holly Lush-Thornton, Knight Frank Research, commented: “PBSA developers have taken advantage of a quieter land market and softer pricing over the last 12 months, with some more traditional market participants having taking a ‘wait and see’ approach given challenges around viability and private sales demand.”
She added: “Currently, the total pipeline for 2025 is just shy of 200,000 beds across the UK, with 23% of this under construction and a further 48% with full planning permission granted.”
