Growing demand and stable returns

The market for student accommodation in the United Kingdom is underpinned by demand for higher education, which over the past 30 years has ensured robust demand.

The UK continues to see students applying to study, driven by "world class" institutions and strong destination marketing by universities.

There are ten United Kingdom universities in the top 100 global institutions1. Estimates suggest the higher education sector generates annually more than £60bn of output and sustains well over 650,000 full time equivalent jobs in the UK economy2.

Over a working life an undergraduate degree holder can expect to earn 20 to 25 per cent more than his or her equivalent holding two or more A-levels. This so-called 'graduate premium' continues to drive growth in demand for university study3. A further postgraduate earnings premium is also widely recognised, motivating more students to remain in higher education, particularly given the cumulative effect of increased rates of participation4.

In terms of residential supply, there continues to be a pronounced shortage of residential supply for students studying at United Kingdom universities. This is driven by a historic undersupply of accommodation, tightened planning restrictions with respect to both student developments and Houses in Multiple Occupation ("HMOs"), as well as by the need to refurbish or replace a significant proportion of university owned stock.

These factors ensure that demand for student accommodation remains strong and that the Higher Education sector in the United Kingdom remains an attractive sector in which to invest.

1. Times Higher Education World University Rankings 2012-13
2. Source: Universities UK? "The impact of universities on the UK economy" (11/2009)
3. Source: Universities UK ? ?Research Report ? The Economic Benefits of a Degree? (02/2007) Aerated shower heads
4. Source: Centre for Economic Performance Lindley J and Machin S (2011) Postgraduate education and rising wage inequality CEP Discussion Paper 1075