Student Accommodation
The UK Market

The Market

The demand for UK Higher education to keep rising:

  • Government caps on student numbers in the UK have been removed altogether in 2015/16, with UCAS’ mid-September update on the student market showing the following:

                o   All students +3%

                o   International students (non-EU) +3%

                o   EU students +14%

  • Demand has remained robust throughout the introduction of increased tuition fees in 2012 and the weakened economic environment
  • Number of international students is expected to double globally by 2025
  • In 2012 the UK was the second largest destination for international higher education with a 13% global share, second only to the USA with a 16% share
  • 23% of students in the UK were postgraduates
  • The first nine months of 2015 have seen a record £4.25 billion in student housing transactions compared with the previous high of £2.7 billion in FY 2012
  • The strength of the UK universities is key to the success of our business and The Times Higher Education university financial health check found:

                o   Total UK universities’ income for 2013/14 up 5.7% year on year

                o   Total UK universities’ surplus for 2013/14 up 12.6% year on year

 

The number of international students is growing significantly:

  • International students, from both inside and outside of the EU, accounted for 19% of the UK student population, some 435,000 students
  • Student demand has steadily increased with international demand rising particularly fast: Other EU: 2004-2014 up 6.4% / 2008-2014 up 5.2%; Non EU: 2004-2014 up 4.3% / 2008-2014 up 5.8%
  • Number of students enrolled outside of their country of citizenship: 1975-2025 (Estimated): 4.8% CAGR
  • These international students are attracted to the quality of the UK's universities and teaching, a globally recognised qualification and the opportunity to enjoy life in the UK
  • “We are committed to increasing education exports from £18 billion in 2012 to £30 billion by 2020. We will not achieve that goal unless we continue to attract the brightest and best from around the world” Jo Johnson, Universities and Sciences Minister

 

Student Accommodation is a Robust Asset Class:

  • UK student accommodation yields have remained relatively stable since 2006, suffering less volatility than other real estate sectors
  • Student accommodation rental growth in the UK of 50+% between 2006 and 2013 has surpassed all other real estate asset sectors and significantly outpaced RPI
  • Total investment in the UK student accommodation sector surpassed £2 billion for a second consecutive year in 2013, increasingly from international sources and £2.8 billion for 2014

 

Tenants - Undersupply of student accommodation in key cities:

  • Purpose-built accommodation remains well below student numbers in key UK university cities and does not support the strong demand
  • The unfavourable supply situation affects the key university cities in the regions as well as London
  • University places are being held back by lack of student accommodation
  • The construction of new beds for 2014/15 has been matched by the increase in student numbers and, hence, the chronic undersupply remains unchanged
  • Postgraduate / sponsored students are often required to live in purpose-built accommodation
  • Today’s students want “plug & play” accommodation (bills, internet etc.)
  • Downward pressure on Houses in Multiple Occupation (“HMO”) provision

Who we are

The Empiric management team has a long track record in the acquisition, development and management of student accommodation assets in the UK.

Financial

Empiric is an internally managed UK REIT investing in premium student accommodation in the UK and was listed on the Main Market of the LSE in June 2014.

INFOGRAPHIC: Student population with access to purpose-built accommodation | Empiric Student Propert

Questions? Get in touch.

Contact Us

Empiric Head Office
Empiric Student Property plc
Swan House, 17-19 Stratford Place, London W1C 1BQ

info@empiric.co.uk
+44 (0)20 3828 8700

Media Contact

James Benjamin
Partner
Newgate Communications LLP

empiric@newgatecomms.com
+44 (0)20 7680 6550

Broker

Stuart Klein
Managing Director, Corporate Broking
Jefferies International Ltd

stuart.klein@jefferies.com
+44 (0) 20 7029 8000