The first half of 2024 witnessed a significant increase in investment within the Purpose-Built Student Accommodation (PBSA) sector, reaching £2.45 billion—up from £1.1 billion during the same period in 2023. Notably, the second quarter alone accounted for £1.7 billion, marking the strongest quarter since 2022. This surge highlights the sector’s resilience and appeal to investors.¹ As leading residential developers, we are perfectly positioned to make the most of this improving picture.
Institutional Investment
Despite ongoing concerns surrounding the new regulatory processes for higher-risk buildings, institutional investors—such as Aviva, M&G, and Legal & General—are increasing their investments in new PBSA and Private Rented Sector (PRS) developments, signalling strong confidence in the sector’s fundamental demand and long-term prospects.²
Strong Demand Driving Growth
The demand for rental properties in the UK has never been higher. A combination of factors, including rising house prices, a growing population, and evolving lifestyle preferences, has led to an increased reliance on rental accommodation. This demand has created a resilient market that continues to attract institutional capital, with investors seeing opportunities for stable, long-term returns.
PBSA and PRS developments are at the forefront of institutional investment strategies. These purpose-built rental properties offer high-quality amenities and professional management, catering to the needs of modern tenants. For investors, these projects provide a scalable, income-generating asset class that aligns with long-term investment goals, particularly in urban areas where demand is highest.
ESG and Sustainability Considerations
Investing in new developments presents the opportunity to incorporate sustainable building practices, energy-efficient designs, and community-focused initiatives in the design and decision-making processes. This approach enables the achievement of environmental, social, and governance (ESG) targets while enhancing the long-term value of investments.
Future Outlook
CBRE’s PBSA Index reported total returns of 9.8% in the year leading up to September 2024. During this period, PBSA outperformed all commercial property sectors, marking the third consecutive year of robust performance.³
With continued urbanisation and a shift towards renting as a lifestyle choice, the UK rental market is expected to remain a key focus for institutional investors. This focus creates opportunities for further innovation, sustainability initiatives, and an overall positive impact on the housing landscape. The combination of strong demand, government support for housing development, and the sector’s resilience positions it as a secure, long-term investment opportunity.
Cassidy Group Ltd Pipeline
Cassidy Group Ltd is a real estate development company based in Warwickshire, with four decades of experience specialising in the UK student accommodation (PBSA) and multifamily (Build-to-Rent and PRS) sectors. Our current to-be-built portfolio is valued at approximately £500 million, aiming to deliver around 3,000 PBSA beds and 1,000 PRS apartments over the next three years. This includes eight schemes across six cities in England, with individual developments ranging from approximately £30 million to £120 million GDV. All sites are owned with implemented planning.
We are always keen to discuss opportunities, investments, and joint ventures with other investment professionals. Please contact us via:
Telephone: +44 (0)1926 431313
Email: info@cassidygroupltd.com
Website: www.cassidygroupltd.com
Research sources:
¹ Purpose-Built Student Accommodation Investment Soars
² Major Investors Pile into UK Rental Homes Despite Regulatory Fears
³ UK Purpose-Built Student Accommodation Index – Year to September 2024