Real Estate Worldwide has been living and breathing private student property investment for many years, with David Coates, Managing Director and his team of Investment Experts educating their customers on this investment asset class: Purpose-built Student Accommodation, commonly known as PBSA.
PBSA need to know?
Investing in PBSA is no different to any other property investment.
Like a city centre high-end residential block is geared to professionals, PBSA is tenanted by students only.
You need to find the right location, which is two-fold. It’s important to choose the right town or city based on supply and demand and the right location within that university town or city as it ideally needs to meet the demands – for convenient living – and tick the boxes of today’s focused student.
The right developer is key, which is where Real Estate Worldwide’s due diligence comes in, with so many PBSA developments in the market its comprehensive suitability test gives its customers peace of mind, which includes but not limited to: developer checks, project suitability – resale potential and profit in the future – management, letting and sample contracts review.
Mission to the industry
Positioned and experienced to offer a well-rounded portfolio of UK student developments, Real Estate Worldwide has an important mission behind the service they offer their customers that heavily lends to what makes it the best provider of student property for investment.
As David explains, “With no restrictions or bias to any one developer we are able to have a positive impact on the industry through our property due diligence, experience and our customers invaluable feedback”
And the sentiment of its mission echoes exactly this point.
The Real Estate Worldwide mission is to be informative, transparent and exceptional in our service of helping our customers fulfil their goals. To have a positive impact on the property investment industry and above all make a difference in the lives of our customers.
Getting to know you
Real Estate Worldwide’s property experts put service first and pride themselves on getting to know their customers to fully understand their short-term and long-term investment goals. They are then able to recommend the right-fit investment.
They will explain in detail how PBSA works, as they want their customers to know as much as they do about the investment sector.
David adds, “Our full-rounded service means a lot of customer care. We educate through the sales process and support our customers through the exchange, construction and completion stages, and beyond.”
PBSA due diligence
Majority of purpose-built student accommodation investments are purchased off-plan or at least during the construction phase, property due diligence is fundamental to every investment and PBSA is no exception.
Every project within Real Estate Worldwide’s student portfolio has been through its thorough due diligence process – even if they have worked with a developer for several years and seen their other projects complete.
“Every project has the same suitability process to understand the means to delivery, who the contractor is and the schedule of works – along with ensuring there is: demand and under supply in the area, the development is conveniently located to the university campus(es) and the town centre, there are sought-after facilities such as a gymnasium, resident lounge, cinema room for students health and wellbeing and last but not least the weekly rents and overall annual rental return is sustainable.” David explains.
Sharing the student accommodation investment framework
REW property experts navigate their customers through the PBSA framework to ensure a full understanding as well as filling in any research gaps. Like any large-cash investment REW’s primary goal is to secure the absolute best opportunity for its customer.
Chris Britto, Head of Investments, explains “In our quest to get to know our clients, I love exposing any misconstrued facts & myths around PBSA. It’s important to understand this is a property investment like any other, with full ownership of the property – registered at land registry – to understand it can be sold to a new investor at any time, to understand rental returns, to understand it is let & managed by a specialist and on the whole to know this is a stress free investment that provides passive income.”
One such myth REW hears at times is, “big cities guarantee big yields”. In many cases a second or third-tier town can provide a higher and more sustainable yield. The reason is straightforward, there is less supply, more demand and land prices are far less expensive, moreover the purchase price is then relevant to the lower land cost and subsequently churns out a higher annual yield for the investor. This has also been observed to impact resale value/appreciation – that said if investors are enjoying 8% to 10% yields there is seldom a reason to resell.
Chris continues, “When seeking the best PBSA we look at factors attached to the university too such as rankings and specialist departments, like medical or engineering, as these will attract a high-end student from around the world, and overseas students are the main market who take-up PBSA without question.”
Experts in off-plan & developer funding
With majority of sought-after student accommodation sold off-plan Real Estate Worldwide uses its due diligence criteria, open-market network and knowledge to select correctly funded PBSA investments. Future rents are checked, and sustainability is tested based on all the variables within the location.
The investor can then benefit from the various advantages of buying off-plan, including, interest during build, pre-launch discounts and incentives, off-plan below market value prices and first pick of studio or ensuite.
David Coates, adds: Seeing how private student living has evolved globally and in the UK over the last number of years, REW has always kept insightful on what is having an impact on the market – positively and negatively – and we have selected our portfolio of investments accordingly. We have always kept a varied mix of student property within our portfolio that covers all the key factors ensuring our investors gain the best long-term investment on the market.”