Research - 04/03/2024

PBSA Belfast

Increased investment to follow student's lead

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LSH research finds Belfast is set for more Purpose Built Student Accommodation as student numbers and investor interest increases

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The development of Purpose-Built Student Accommodation (PBSA) is set to rise further across Belfast city centre as demand for student accommodation continues to grow and well occupied schemes become more attractive to investors.

Research conducted by Lambert Smith Hampton into PBSA in Belfast has highlighted that with the student accommodation market now established and student numbers in the city on the rise, the sector is particularly appealing to institutional investors and funds. 

Since 2016 the city has seen over 5,000 beds developed across 12 PBSA schemes in the city centre housing students from Ulster University and Queen’s University Belfast. With seven sites accounting for 3,773 beds currently in planning and more under consideration the market is growing significantly with no signs of slowing down.

Demand for PBSA is set to continue with UCAS forecasting that there will be a 20% rise in Northern Ireland school leavers seeking university places by 2030. In a recent university led submission to Belfast City Council, universities said there is a need for 6,000 additional student rooms in Belfast by 2030 as current supply is at capacity.

Andrew Mearns, Director at Lambert Smith Hampton, said: “Over the past eight years there has been a significant increase in the number of newly developed PBSA schemes across Belfast city. Primarily due to Ulster University relocating to the city, Belfast now benefits from a student population that is estimated to be around 45,000.”

“With this new market brings huge opportunity for investors. It’s still early and we are yet to witness any significant investment transaction volume but we predict this will change moving forward as the occupational market is now maturing. Growth in this market long term could feed into the potential future growth of Build To Rent (BTR) in Belfast as students become graduates and young professionals.”

Claire Shaw, Senior Research Analyst at Lambert Smith Hampton, said: “Prior to PBSA activity commencing in 2016, the ratio of students to PBSA bed spaces was 10:1, which was high compared to other UK university cities at the time like Cardiff which was 5:1. In other cities such as Liverpool and Sheffield this market is now highly saturated with ratios looking more like 2:1. We predict that the ratio in Belfast will be 5:1 by September 2024 which supports the suggestion that this is an appealing market for commercial real estate investors in Belfast over the coming years.”

Unaffordable rent, increased tuition fees and difficulties with visa applications for international students are all issues which long term could negatively impact on the market.

But with increasing evidence that PBSA is more attractive to many occupiers than the historic preference of private rental accommodation in the south of the city and the forecasted increase in Belfast based students over the next few years, the market has a new appeal to investors and local businesses who will benefit from this new demographic residing in the city.

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