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St Andrews Place Student Investment

St Andrews Place Student Investment

AT A GLANCE

  • Student Investment Property
  • Just £48,000 each
  • 10% net yields
  • 1st 51 week rental Assured
  • Fully managed “hands off” opportunity
  • Fantastic city centre location
  • Seconds from John Moore’s University
  • Prestigious Development
  • Student accommodation seeing record demand
  • Developer is established in the student sector

In detail

THE OPPORTUNITY:

If you are an active property investor the chances are you have looked at some element of student property in the past.

Student Property Investment has grown from something seen as high risk to a much more refined investment. With the introduction of high value fully managed student rooms student property investment is now seen as a market leading investment with many funds choosing to concentrate on it completely.

In a market where many investors have seen rental voids, capital values and Ltv rates decrease, why are many of the UK’s most renowned investors focusing on Student Accommodation?

If you look at the simple economics, student accommodation really does sell itself.

In short, you can purchase a property that will rent at a much higher value to students than an equivalent unit would to a private individual. You also do not have the downfall of rental voids! In fact, many opportunities include assured rental returns!

Our latest opportunity is a block of just 100 student pods located in Liverpool City Centre. With prices at just £48,000 each, this represents a fantastic opportunity to purchase in a market that is seeing phenomenal growth.

INVESTMENT BREAKDOWN:
1 Bedroom Student Pod

  • Purchase Price: £48,000
  • Gross Annual Income: £6,375
  • Maintenance and expenses: £1,050
  • Management Fee: £510
  • Net Income: £4,815
  • Net Yield: 10.03%

THE DEVELOPMENT:

When it comes to student property, it's proximity to Universities is everything....this is just one area where St Andrews Place excels!

Being just 0.3 miles away from the University of Liverpool, 200ft away from the student union, 3.3 miles away from John Moore’s university and 0.5 miles away from the city centre, the developer has definitely found a great location for their next student development in Liverpool.

Containing 100 student pods, this student development will include an enviable list of facilities inc:

  • Gym
  • Laundry
  • Media service inc printer and photocopier
  • Stunning Courtyard
  • Communal Lounge inc 42” TV

Each pod will come readily equipped with:

  • 22” Flat Screen Television
  • One bed
  • One Wardrobe
  • One Desk
  • One Chair
  • Carpets
  • Blinds
  • Internet Access is included with each room
 
The student accommodation sector is becoming increasingly competitive and normally the units in the best location with the best facilities can charge the highest rental.

With prices from just £125 per week and most competitors charging far more, investors can rest assured their pods will achieve unparalleled occupancy rates.

LOCATION:

Location is everything for students, as many do not have transport they need to be within walking distance of the city centre and their chosen university.

Our latest student development could not be better positioned.

Within 0.5 miles of Liverpool central train station and just 280ft to the nearest bus stop, prospective students could not ask for more!

ACCESSIBILITY:

  • University of Liverpool 0.3 miles
  • University of Liverpool student union 200ft
  • Liverpool University School of Tropical Medicine 0.4 miles
  • Royal Liverpool University Hospital 0.7 miles
  • City Centre 0.5 miles

These distances are supplied as examples and general guidance and the accuracy cannot be guaranteed.

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Further Information

DEMAND:

Where rental demand in the residential sector is prone to peaks and troughs, student number have continued to rise from 1.8 million in 1996-97 to approaching 2.4 million in 2009-10.

Indeed early indications are that the economic conditions have led to even more people looking to higher education.

UCAS data revealed that UK university applicants rose 10% between 2008 and 2009 and overseas applicants rose 13.6% during the same period.

“Overall student numbers are likely to remain stable and in the medium-term there is unlikely to be a substantial uplift in student places as caps remain in place. However, the expectation is that the proportions of both overseas and postgraduate students will continue to grow, underpinning future demand for private professionally managed halls.”

SUPPLY:

Private Student Development is still made up of the 4 main service providers, UNITE, UPP, Opal and Liberty Living. The majority of students have to rely on halls for their accommodation with a small percent benefitting from access to private operated rooms.

Many university run halls are found to be outdated and lacking in necessary facilities. This creates demand for private accommodation but with development finance so hard to come by, this accommodation is nowhere near keeping up with demand.

“Student Numbers are growing at 15 times the rate of new supply in London” 

PROSPECTS:

Student accommodation rents have increased by 5% p.a for the last 6 years with growth increasing right into the 2009/10 academic years. Compare this to residential and commercial rents which have both fallen overall during this period and you start to understand what makes this market so appealing.

“Student Housing delivers income during uncertain economic times”

As student accommodation is commercial by class this has also seen an increase in values, this sectors robustness is highly attractive to a growing number of investors who want high capital growth that can be depended on for the long term.

Even in the midst of a global downturn occupation levels for good quality purpose built private accommodation is close to 100% with rental levels for 2010 predicted to increase by at least 5%.

YIELDS AND VALUES:

Although the rentals gained have not been hit by the credit crunch, one side that has been impacted has been the finance student developers have been able to find. Because of a lack of this many new build schemes have not got off the ground.

If we factor this and the fact that university applications have steadily increased we have a demand/supply scenario which is drastically in the favour of the buy to let investor with student property in their portfolio.

Compound this with the fact that many universities cannot afford to build the necessary accommodation themselves and we have a scenario where these same universities cannot grow to their potential because of this lack of accommodation.

Universities have always relied on private developers to make up the deficit that their own student halls cannot fill.

With many student developers not building because of the lending constrictions, small investors are starting to fill the void with new build 4/5 bedroom houses. These normally comply with the rigorous build accreditations and rent for a lot more than residential lettings.

Through this lack of supply yields have risen steadily and values have followed, we envision this to be the case for the foreseeable future. The student market is continually growing and with many universities operating on shoestrings it falls to the private student developers to build in their place.