The analysis by the real estate services and investment management specialists showed that £1.9bn has been invested in the student housing market so far this year.
This is an increase on the £1.7bn that was invested in the same period last year.
At present, there is over £3bn of investment stock pending in the market which is thought to be completed in 2017.
Student housing has been one of the main drivers in the growth in alternatives investment volumes and it is expected to account for 34.7% of alternatives investment volumes this year.
JLL’s analysis predicts that investment volumes will hit £5.4bn by the end of the year, up on the £3.2bn reached in 2016.
This year, Unite Students acquired 640 beds across two sites in Birmingham and Durham for £56m.
This is in addition to Watkin Jones’ disposal of a development portfolio of six schemes to Europa Generation, providing 1,691 beds for £165m.
- Why has student housing become so popular?
- JLL grows alternative property team
- Investec to lend £23.6m for 454-bed student scheme
JLL believes there will be more growth in university student housing partnerships as there is an estimated requirement of a further £5bn needed to meet demand to develop new beds and upgrade ageing stock.
Philip Hillman, chairman of JLL’s alternatives team, said: “Amid a slowdown in some real estate capital markets, the robust and defensive qualities of alternatives assets remain highly attractive in the current climate, as demonstrated by the strong levels of investment in the student housing sector in the first half of 2017.
“The softening of the ‘hard Brexit’ rhetoric as a result of the general election result may lead to reconsideration of the Conservative manifesto pledge to keep student visas in any immigration cap.
“This will be further underpinned by demographic fundamentals as the number of 18- to 19-year-olds in the UK is set to increase at a rate of 40,000 per annum for the three years from 2022.
“These are both likely to support a robust performance in the student housing sector.”
JLL predicts that 70% of investment volumes in 2017 will comprise portfolio transactions.