Investing in Purpose-Built Student Accommodation (PBSA) is big business. The sector has become increasingly popular around the world thanks to the relatively low cost of entry and the high potential returns on offer.
Savills estimates that a total of 75,000 beds were traded in 2017, to a value of at least £5.3bn. This represents a 17% rise over the 2016 totals, and goes to show the health of the market. Furthermore, Savills believes that the Brexit situation has only heightened the appetite for PBSA, with more being invested after the 2016 referendum than before it. Given that barely a week goes by without the announcement of a new student development in one of the UK’s major cities, it is perhaps not surprising that most observers only see the continued growth of PBSA as an investment class.
All of which raises the question: where is the best location for a discerning investor to put their money? When it comes to PBSA the most important considerations are a growing student body, a university with a lack of its own accommodation, and a local area which has big investment plans likely to make the university more attractive.
With all of the above taken into consideration, there aren’t many places which fit the bill for PBSA investment better than Salford. The local university is expanding and teaching more students, it has accommodation for fewer than 10% of its students, and the area is the subject of an £800m investment masterplan.
Recently announced by the University of Salford and Salford City Council, the masterplan covers 240 acres around the university site and brings with it significant opportunities. One million sqft of educational space, six million sqft of commercial space targeted at industrial growth sectors and around two million sqft feet of parkland, green landscaped routes and cycleways are the main attractions for students in the area. Locals will also benefit, with 2,500 new residential homes and apartments planned for the area.
The industrial space, based around a new Industrial Collaboration Zone on Frederick Road North, is particularly interesting. It will be aimed at attracting businesses in the creative, digital, health and wellbeing, environment, sport and engineering sectors – not coincidentally the sectors within which the University of Salford excels and enjoys such a fine reputation.
The University already enjoys beneficial collaborative links with local businesses in similar sectors – for instance the campus at MediaCityUK – and further growth of its preferred sectors in the nearby area will provide even more opportunity for its students. It looks as if the Frederick Road Campus is set to become an impressive hub which will allow education, research and business to collaborate freely.
Mayor of Salford Paul Dennett agrees, saying of the scheme: “the City of Salford has attracted billions of pounds of private sector investment in the last decade and delivered nationally important regeneration projects that have brought new industries, new training and development opportunities and new jobs to the city.
“The combined assets of the city and the university around The Crescent present a huge opportunity for the continued growth of the city linking education with enterprise and industry and arts, culture, heritage and community.”
All of the above will make Salford an even more attractive higher education destination than it already is, leading to the growth of the student body. With the University of Salford already having nowhere near enough accommodation for its students, this is the perfect time to invest in PBSA in Salford.
X1 The Campus is an outstanding student accommodation investment opportunity. Located on the Frederick Road Campus, this development will be extremely popular with student residents looking to live only a few minutes’ walk from both their university and the new educational and commercial facilities set to be built as part of the new masterplan. Frederick Road is at the heart of Salford’s exciting future, and X1 The Campus is situated perfectly to take advantage of this.