Student housing investors are becomingly increasingly “sophisticated”, according to law firm Pinsent Masons.
The company said that initial fears that the collapse of student housing provider Opal Property Group would deter investors from the sector have never materialised. On the contrary, a host of buyers, including new entrants, bought the Opal assets.
Victoria Goddard, property partner at Pinsent Masons, said: “Investors in student accommodation are increasingly sophisticated and professional in outlook, with heavier reporting requirements as a corollary. In time we anticipate a drive towards consolidation in the sector as operators, especially new entrants, seek to grow their portfolios, although this is currently being delayed by limited availability of capital.”
New entrants to the market last year included New York-based Avenue Capital and South Carolina-based Greystar Real Estate .
Pinsent Masons calculated that first-time investors accounted for 50% of the bidders for the 21 available Opal assets last year.
Goddard added: “Allied to the arrival of pension funds, there is an increasingly diverse investor base that both demonstrates the popularity of the sector as an asset class and raises the prospect of increased trading as more investment portfolios are adjusted.”
According to CBRE, £2.1bn was transacted in the UK student accommodation market in 2013.