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JLL: Student Housing “Less Vulnerable” to Brexit than Other Asset Classes

Activity in the student sector is expected to remain buoyant in second half of 2016, as the sector benefits from a “comparative resilience to wider economic issues”, says real-estate services provider Jones Lang LaSalle.

Activity in the student sector is expected to remain buoyant in second half of 2016, as the sector benefits from a “comparative resilience to wider economic issues”, says real-estate services provider Jones Lang LaSalle.

Although investor sentiment across all other asset classes softened in Q2 as a result of the Referendum vote and widespread economic uncertainty, JLL predicts the student sector will see demand for “well-located student housing schemes” remain strong.


According to the report, £1.5 billion transactions have been completed in the student market in 2016 so far, whilst a further £0.5 billion are currently under offer and an extra £1.5 billion are projected to be invested in the sector by the end of 2016.


The firm remains confident the structural undersupply of PBSA will continue to underpin rental growth in the sector; in London, they project rental growth of 3-4% and 1-5% across the UK. Prime yields are also expected to remain robust aided by good occupancy rates and attractive income growth.


Furthermore, the depreciation of the Sterling is expected to attract higher demand from both overseas and domestic students. Also, JLL expects a boost in deals in September as students for the 2016/17 academic year start booking their accommodation – rising occupancy levels – and as political uncertainty eases.


In a separate publication, writing with regards to the student market and the potential impact of Brexit, JLL said: “It is still too early to have definite views on the implications for the PBSA market, although the sector looks less vulnerable to the Brexit shock in comparison to other property sectors […]”


Earlier this month, the A-levels results announcement showed some 424,000 students receive confirmed places in their respective universities, with the number of EU students increasing by 11% to 26,800 despite fears.

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