Student accommodation boom: Construction contracts up 34%

The development of new student accommodation has emerged as one of the most promising residential sectors for securing new work contracts this year.

Against a background of a mixed outlook for new housing work generally, the April edition of the Glenigan Construction Review notes that work starting on site on student accommodation schemes was worth £502 million in the first quarter alone, a rise of 34% on the period a year ago. In all, student accommodation now accounts for a 5% share of total housing starts.

Student numbers, both domestic and particularly from overseas, are continuing to climb; up by 4% in total during 2022/23. And despite budget challenges across the higher education sector, the building programme for new student housing at universities and colleges is gathering pace.

The upturn in activity in the sector is in keeping with the latest Glenigan Construction Industry Forecast 2024-25, published in November 2023, which predicts a 16% increase in student accommodation starts in 2024, followed by a further 10% upturn in 2025.

The mood at Unite Group, the country’s largest owner and developer of student accommodation, is positive. Earlier this month, the group said that it was seeing continued strong demand for student space and that it had sold 86% of its ‘bedrooms’ for the 2024/25 academic year. Its rents are set to rise by 6% in the coming academic year.

Development pipeline worth £1.3 billion

Today, Unite is progressing a £1.3 billion development pipeline and it has recently secured planning approvals for major student schemes involving 1,450 new bedrooms in London and Bristol.

With demand from universities continuing to grow, Unite has also secured agreements for a further 1,000 student bedrooms since March. Demand from international students – who occupy 13% of rooms – remains robust despite recent changes to UK visa rules. (Overseas students are a key market for developers as they are more likely to stay in purpose-built student accommodation throughout their studies.)

Unite has recently secured planning approval on a 500-bed student accommodation project close to the University of Bristol’s new Temple Quarter Enterprise Campus (pictured). Glenigan data shows that work is set to start on the £73 million Freestone Island, involving almost 18,000 sq m of space, later this summer and run for 13 months (Project ID: 22350495).

Elsewhere at Meridian Place, in Stratford, East London, Unite has won a resolution to grant planning permission for a 952-bed project to be delivered in time for the 2028/29 academic year.

Meanwhile, in a joint venture with Newcastle University, Unite is set to put in a planning application on a £250 million student accommodation scheme involving around 2,000 new bedrooms at Castle Leazes in the city. Plans have been submitted to demolish existing buildings ahead of construction starting in early 2025 (Project ID: 19376827).

Significant projects in cities

Glenigan data highlights numerous other significant student accommodation projects in the pipeline in cities nationwide.

In Manchester, plans have been submitted for the redevelopment of the former Hotspur Press complex in Gloucester Street with an £84.4 million student scheme involving some 580 units above a ground floor commercial/amenity space (Project ID: 18270098).

Across the Pennines in Leeds, detailed plans have been submitted by developer Brigade Central for a £34.24 million scheme to provide 198 student accommodation apartments at Kirkstall Road where work is set to start later this year and run for 12 months (Project ID: 23351417).

Meanwhile, in London, detailed plans have recently been approved for a £29.45 million student accommodation project in Newham to provide 325 purpose-built units. Work on Marshgate Lane Accommodation, involving over 10,000 sq m of space, is set to start this autumn and run for 12 months (Project ID: 18397804).