A large number of students migrate to the United States every year to explore high education opportunities. The prominence of higher education across the world has elevated considerably, in general, over the decades. This has led to the emergence of Purpose-built student accommodation (PBSA) as a new and lucrative asset class in the U.S, as demanded by international and domestic students. As the usual macro and micro-environmental forces that influence the buy-to-let do not affect student properties, PBSA can provide commendable returns on investment. This sector is capable enough to stand on its own, and boasts of having a proven track record of resilience in times of recession. There are many companies like Nelson Partners through whom one can invest in PBSA assets.
Major purpose-built student accommodation (PBSA) players across the world focus on expanding their reach and boosting their property portfolio. The United States tops the league tables in terms of investments, both domestic and cross-border. The PBSA sector appears to be mostly stable, and had planned investments in new housing steady even during the pandemic. This sector also showed a strong return after the vaccine roll out and the easing of restrictions associated with the Covid-19 pandemic. There also has been an increase in the capital allocation in the co-living segment, which subsequently has managed to broaden the scope of student housing as well.
PBSA properties yields are quite attractive, especially due to its c consistently high demand. Most PSBA are smartly located, usually at just a walking distance from a university. In such neighborhoods, the demand for student accommodation is typically higher than supply. Hence, student rents almost always hold up for PBSA and fares better in comparison to traditional buy-to-let opportunities. Most PSBA units also enjoy a close proximity to the city center and hence have important amenities just minutes away. This factor plays a major role in increasing the odds of capital growth and high yields in case of student accommodation.
A good number of students today are drawn towards PBSA as these properties are designed specifically to take care of their needs and requirements. From the point of view of the students, people staying at a purpose-built accommodation will have to pay a monthly fee to take care of their rent, Wi-Fi and other facilities, which eases their hassles to a great extent. Anyone investing in PBSA is unlikely to face issues in finding their tenants. PSBA properties are designed to encourage a sense of community among the students, and offer them high-quality services and unique experiences.
Due to the rental assurance periods of PBSA, the rental income of the investors stays secure, regardless of what happens with a development. Moreover, the majority of the PBSA have building security, maintenance and management. Hence, the investors get to enjoy a hassle-free, fully managed investment. Nelson Partners is one such leading US based company that specializes in PBSA development and management.
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