The student property market has a longstanding status as the best performing asset class in Great Britain, with upwards of 2.3million students having no access to university-provided accommodation

Traditionally the quality of student accommodation has been poor – with students having to live in tired and run-down houses of multiple occupancy, and investors receiving very little to no returns

International student numbers to the UK’s universities have increased by 30% in the last five years and the Department for Business, Innovation and Skills believes there will be a further growth of between 15 and 20% over the next five years.

In Newcastle there are two prominent universities. The Russell Group Newcastle University and the region’s largest university Northumbria University attract over 50,000 students between them due to their internationally renowned reputations; among these, 40,000 students do not have access to Purpose-built student accommodation (PBSA)

The potential for investment is very apparent. Savills has very recently elevated Newcastle into its first tier of student property investment opportunities in the UK. It was one of a few select cities to show any upward movement in this definitive ranking of 50 cities. This means that Savills believes student accommodation in Newcastle is one of the best investments the UK can currently offer.

In less than ten years, international student numbers in Newcastle have increased by 30% and the city now welcomes 9,000 overseas students every year

The house of multiple occupancy (HMO) stock that is plugging Newcastle’s supply gap, is just not appealing to the evolving needs of an increasingly international student base. In fact, Knight Frank identified the city to have the second highest PBSA premium in the whole of the UK, with students more than ready to pay up to 75% more for PBSA (Purpose-built student accommodation) than HMO's (Houses of Multiple Occupancy)

RISING RENTS

In the last 12 months, Newcastle has seen a 6% rental increase across studio stock and the largest apartments now command an average rate of £185 per week. This shows new investments need to be high end and appealing to a student market that is willing to pay. However, even the existing properties that are exhibiting this significant rental growth fail to completely align with the demanding needs of the student base, and this is resulting in an identifiable gap in the market.

THE INVESTMENT 

Located close to an impressive urban vista and within a few minutes’ walk from the £8.6 million refurbished Newcastle station, lies this beautiful establishment. Ornate double-length windows reflect a welcoming scene and hint at the grandeur beyond. Exterior seating from local bars and food outlets provide an accommodating approach, while the façade of the building perfectly blends modern style with the local character.

Each of the individual 259 properties has been architecturally designed and expertly furnished. Self-contained studios – ranging from 19m2 to 39m2 in size – come complete with a quality fitted kitchen and top-spec, en-suite shower room

The accommodation will be easily identifiable as the best in the city, as students will be supplied with the sought-after sanctuary that has previously only been associated with the finest hotel brands.

Students Will Be Offered:

Units start from £93,774 and returns are expected to start from a conservative rate of 8%, with an optimistic forecast of 12%