Bull run in student housing market as Allianz opens new chapter
Allianz has completed a £350m investment into a joint property venture with Greystar and a Canadian pension manager, in a move that signals growing international confidence in London’s student housing market.
In a £1.5bn project that aims to complete 10,000 new student beds and the doubling of its portfolio size within five years, German-based Allianz Real Estate revealed yesterday the completion of a partnership with US real estate firm Greystar and Canadian pension investment managers Public Sector Pension Investment Board (PSP).
Read more: There is fresh evidence of a slowdown in Greater London's property market
The joint venture, which is geared towards expanding London student accommodation brand "Chapter", is fresh evidence of increasing confidence in the university property sector.
"Student accommodation nationwide is on a bull run right now" according to James Hanmer, head of UK student housing at Savills.
"The student housing market is tremendously robust, and we look to see as much transaction volume this year as last year. It is well favoured by investors for its yearly rental growth and attractive yields – ultimately it comes down to the fact that in London especially, there is a lot more demand than supply."
Read more: House prices in the capital sink to lowest level since financial crisis
Greystar founder and chief executive Bob Faith said: "This partnership marks an important step in the rapidly growing institutional-grade rental housing and student accommodation investment market in the UK…We have a hugely ambitious target to scale the business to secure major operational efficiencies."
Faith added: "London’s housing market is under enormous pressure and student accommodation in prime locations is highly constrained,” added Faith. “London is a global leader in higher education attracting students from around the world and Chapter is well positioned to provide quality housing in prime locations. "