Student accommodation returns reach 13.5% in September 2010
Knight Frank has launched a new Student Accommodation Index – the first industry benchmark to accurately track the performance of this asset class. Average rents for investment class student accommodation rose 2.2% across England & Wales in the year to September 2010. Average rents in London fell back over the period by an average of 3.6%, whereas rents for regional cities rose by 4.1%. Investment returns across England & Wales fell back from 6.56% in September 2009 to 6.25% in September 2010.
Current investment yields stand at 6.00% in London and 6.5% in the regions , while total returns (income and capital value growth) stood at 13.5% in England & Wales in September.
James Pullan, Knight Frank’s head of student property commented: “Student property has delivered consistently healthy returns over the past five years. The sector avoided the crash in both capital values and rentals seen in the wider commercial and residential sectors in 2008 and early 2009 …