Student housing in Norwich proves popular with investors
- Credit: Archant
Graham Jones, of Roche Chartered Surveyors, considers the market for student housing in Norwich.
The last two years has witnessed a remarkable surge in activity in the development of student housing in Norwich – but how and why now?
The UEA campus has already provided significant expansion of student housing during the last 10-15 years. In total, the number of beds within Purpose Built Student Accommodation (PBSA) in the city is in the region of 5,000, but there are more than 15,000 full-time students in higher education in Norwich – quite a shortfall, where the private sector needs to step in.
Until 2015 there had been virtually no development in the city centre of large private sector PBSA buildings. Alumno Developments provided the first – a 220-bed development at All Saints Green; and they are now under construction with a second building providing a further 244 beds for next year.
If these numbers are impressive then it is almost staggering that in excess of 1,600 more beds are now in the development pipeline, by a variety of developers at a number of sites throughout the city centre.
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The driving force behind such development is not necessarily significant growth in student numbers in Norwich (this has remained relatively steady for years), but instead how well the city is regarded as a centre for education and investment on a national scale.
Add to this the growth in the number of overseas students, who often prefer the high specification accommodation modern that PBSA provides, the relative affordability of land and buildings in the city and the weight of private equity in the market seeking the robust returns on investment that the student housing sector provides, and the story behind the last two years becomes a lot clearer.
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One final important piece of the jigsaw has been the opportunity to redevelop large office blocks that for some time have proved commercially unviable for continued office use. Student housing can now on occasions provide the greatest returns and highest capital values.
These office blocks include some of the city's largest buildings, some of which have been empty for years.
A single transaction to convert a whole building to student housing can equate to almost a whole year's worth of typical office transactions.
Roche Chartered Surveyors has acted on some of these, including the largest to date – the sale of the Surrey Street Towers comprising 153,000sq ft to Crown Student Living.
How much more student housing development is to come? Only time will tell, but at Roche Chartered Surveyors we continue to be involved in these transactions, which for the time being suggests the appetite is almost insatiable.