The CBRE student accommodation index revealed that this figure was up on the 4.5% growth recorded in the year to September 2017.
On a gross and net basis, rents have increased 3% and 3.4% respectively.
The index is disaggregated into ‘central London’ and ‘regional’ geographies, with the latter being further split into super prime, prime and secondary.
Student accommodation in central London outperformed regional by a wide margin.
Driven by capital value growth of 12.4%, central London student accommodation annual total returns hit 17.5% for the year to September 2018, compared with 14.2% for the previous 12 months.
- The nature of student accommodation has begun to change
- Global student housing investment volumes up 87%
- Former Lancaster nightclub to be transformed into student housing
Regional student accommodation total returns to September 2018 reached 10.5%, with capital growth of 4.5%.
“UK student accommodation is now firmly established as a mainstream investment sector,” said Jo Winchester, head of student accommodation at CBRE.
“Investors will find the increasingly sophisticated raft of influences on performance highlighted by this index – including location, asset scale, university rankings, applications and distance to university – very informative.”