Student accommodation capital values rose 6.5% over the past 12 months according to new research.

Hydrogen building student roost

Source: Student Roost

CBRE’s first-ever Student Accommodation Index found that capital value growth across all student property was 6.5% in the period to September 2018, compared to 4.5% last year, while net rents rose 3.4% over the same period.

At the national level annual total returns were 12.3% for the year to September while the CBRE index found that London-based student accommodation outperformed the regions across all three measures.

Driven by capital value growth of 12.4%, central London student accommodation annual total returns reached 17.5% for the year to September 2018, compared with 14.2% for the previous 12 months. By contrast regional student accommodation annual total returns were 10.5%, with capital growth of 4.5%.

Earlier today, student accommodation developer Urbanest agreed a £125m loan with M&G Investments to finance a mixed-use student-focused development scheme in the City of London. In one of the largest deals of its kind this year, M&G will fund the construction of Urbanest’s Aldgate scheme, to be known as UrbanestCity, featuring 654 beds for students from King’s College London.

Of the properties located outside of central London, student accommodation situated in ‘Super Prime’ towns including Oxford and Cambridge reported capital growth of 11.1% well above those in ‘prime regional’ areas at 6%. Meanwhile cities and towns categorized as ‘secondary’ locations by CBRE showed a drop of 9% in capital value growth.

 Total ReturnCapital Value GrowthNet Rental Value Growth

All Student Accommodation












  • Super Prime




  • Prime Regional




  • Secondary




Jo Winchester, executive director of student accommodation valuation & advisory services at CBRE UK, said: “This first published Student Accommodation Index demonstrates the continued strong performance of the sector which has outperformed the CBRE Monthly Index over the last eight years. UK student accommodation is now firmly established as a mainstream investment sector.”

While gross rental value growth was positive in all three categories, net rental value growth showed much more of a divergence. Net rental value growth in super prime and prime regional towns in the 12 months to September was 3.6% and 3.9% respectively. In secondary locations, net rental value decreased -1.5% over the year.

In terms of scale, large student accommodation properties (500+ beds) slightly outperformed small (less than 250 beds) and medium (250-500 beds) properties for the year. Capital values for large assets rose 7.2% pushing total returns to 12.9%. Capital growth in small (5.8%) and medium (6.2%) student accommodation properties resulted in total returns of 11.6% and 12.2% respectively.