Commercial property: Student accommodation results are in

Some 1,267 new purpose-built student accommodation (PBSA) beds were created in Glasgow and Edinburgh in 2019, taking the combined number to 36,865, according to figures from Cushman & Wakefield.

Students walk and talk using mobile devices in university
Students walk and talk using mobile devices in university

But the property firm’s UK Student Accommodation Report for the year shows that while Glasgow saw a 1,100 increase in PBSA beds to 18,431, the Capital reported just 167 new bed spaces.

According to David Feeney, one of the report’s authors, the growth in Glasgow comes thanks to the launch of new developments such as Boyce House, close to the city’s Caledonian University.

Offering luxury accommodation and tech-savvy amenities, students can choose from ensuite rooms in apartments, costing from £145 per week, to studios, from £172 per week.

However, Feeney says that the pace of development in the city is now beginning to slow, with just 400 PBSA beds due for 2020-21.

He says: “All of Glasgow’s higher education institutions have seen continued sustained growth in full-time students over the past five years, which has led to extensive developer interest in the city.

“The market has begun to absorb the huge number of developments – 7,819 new beds have been delivered since 2015 – housing a population the equivalent of a small town.

“As demand and supply dynamics become more balanced, and the market properly absorbs the scale of the new developments, rental growth has edged up by 1.6 per cent between 2018 and 2019. Ongoing uncertainty around market conditions has led to a significant fall in the development pipeline, with just 400 beds confirmed to open for 2020-21.”

Edinburgh, which continues to have the highest concentration of purpose-built beds in Scotland at 18,434, will see only one new PBSA development open this year – the premium 167-bed 
27 King’s Stables Road.

With a city centre location and views of Edinburgh Castle, the development is aimed at the top end of the market – a ‘Diamond Studio’ here has a rental cost of £15,351 per annum.

However, the picture looks very different for the Capital in the years ahead, according to Feeney.

He says: “Due to the historic nature of the city, it has traditionally been more difficult for developers to find suitable sites and obtain planning permission for PBSA than it has been in Glasgow. Yet, despite this, the planning pipeline for the Capital stands at around 2,560 beds.

“The University of Edinburgh continues to attract a huge international student population and the student accommodation market can only go from strength to strength.”

Despite a huge 44 per cent jump in the amount of PBSA in Edinburgh since 2014, landlords have found it easy to fill the spaces and occupancy levels have remained high, with rents increasing.