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Student Accommodation in London 2013

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Presentation to launch the London Residential Research report Student Accommodation 2013. The report itself is available to download and has a range of interactive graphs and tables.

Presentation to launch the London Residential Research report Student Accommodation 2013. The report itself is available to download and has a range of interactive graphs and tables.

Published in: Travel, Business

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  • 1. Nigel Evans – Head of London Residential Research LOREMA UPDATE: STUDENT ACCOMMODATION 2013
  • 2. Nigel Evans - team leader Headlines LOREMA UPDATE: STUDENT ACCOMMODATION 2013
  • 3. Nigel Evans - team leader Rates
  • 4. These are the various rates at which applications submitted permissions granted constructionstarted each year up to and including H1 2013 DOWNLOAD REPORT HERE
  • 5. Essentially a measure of pipeline activity... DOWNLOAD REPORT HERE
  • 6. ...this is how that pipeline looked like pre 2007 pre-Lehman not particularly impressive not particularly active 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts DOWNLOAD REPORT HERE
  • 7. But, in the dark days that were to follow, student housing saved the day... This is what saving the day looks like... 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts DOWNLOAD REPORT HERE
  • 8. 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts An almost instant response DOWNLOAD REPORT HERE
  • 9. more applications... 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* ApplicationApplication DOWNLOAD REPORT HERE
  • 10. 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission More permissions granted DOWNLOAD REPORT HERE
  • 11. 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Starts More starts DOWNLOAD REPORT HERE
  • 12. 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts and from 2009 to 2012 an almost exact correlation between permission rates and construction starts DOWNLOAD REPORT HERE
  • 13. 0 2000 4000 6000 8000 10000 12000 14000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts With permissions being almost immediately converted to construction starts. A dynamic state of affairs but... DOWNLOAD REPORT HERE
  • 14. sameacross the whole of the capital...? DOWNLOAD REPORT HERE
  • 15. Nigel Evans - team leader Inner & Outer BoroughsDOWNLOAD REPORT HERE
  • 16. far more activity in the inner boroughs, more applications more permissions more starts with near flat-line conditions in the outer boroughs. 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts INNER BOROUGHS OUTER BOROUGHS DOWNLOAD REPORT HERE
  • 17. requires closer inspection – when data lines cross as in the inner boroughs (application and permission rates down but a surge in construction starts) 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts INNER BOROUGHS OUTER BOROUGHS DOWNLOAD REPORT HERE
  • 18. or they spike as in the outer boroughs (going from 323 units in 2010 to 7,810 units submitted in 2012) 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts INNER BOROUGHS OUTER BOROUGHS DOWNLOAD REPORT HERE
  • 19. something of significance is almost always behind it (Let’s take a detailed look starting with the inner boroughs) 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Application Permission Starts INNER BOROUGHS OUTER BOROUGHS DOWNLOAD REPORT HERE
  • 20. Nigel Evans - team leader Inner Boroughs DOWNLOAD REPORT HERE
  • 21. The recent spurtin construction starts, we estimate it could top the 6,900 unit mark in the inner boroughs by year end (estimated by doubling H1 2013 figures), points not only to confidence in the sector but also of demand. 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Starts DOWNLOAD REPORT HERE
  • 22. However, in such a scenario we would expect the application pipeline to show a corresponding increase as well 0 1000 2000 3000 4000 5000 6000 7000 8000 2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013* Starts DOWNLOAD REPORT HERE
  • 23. But in the case of student housing this is simply not the case DOWNLOAD REPORT HERE
  • 24. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG Spot the inner borough application pipeline INNER BOROUGHS OUTER BOROUGHS DOWNLOAD REPORT HERE
  • 25. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG Spot the inner borough application pipeline INNER BOROUGHS OUTER BOROUGHS Application pipeline DOWNLOAD REPORT HERE
  • 26. DOWNLOAD REPORT HERE
  • 27. 530 units about the size of a medium sized student block and that’s all that’s left... DOWNLOAD REPORT HERE
  • 28. This is a pipeline whose foundations are being eroded but not replaced DOWNLOAD REPORT HERE
  • 29. If construction rates continue at the same level as they have done post-Lehman then
  • 30. the entire stock of potential student housing in the inner boroughs could be exhausted by the end of 2014 DOWNLOAD REPORT HERE
  • 31. ironically very forces driving the student housing since 2007 now risk slowing it down, albeit inadvertently. Let’s take a closer look at those forces... DOWNLOAD REPORT HERE
  • 32. Nigel Evans - team leader LOREMA Recap DOWNLOAD REPORT HERE
  • 33. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2,000 4,000 6,000 8,000 10,000 12,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 OuterLondon construction starts 2004-2011 private units Inner London construction starts 2004-2011 private units End 2011: starts: Inner borough up 7%. starts: Outerup 53% *Private residential DOWNLOAD REPORT HERE
  • 34. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2,000 4,000 6,000 8,000 10,000 12,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 Outer London construction starts 2004-2012 private units Inner London construction starts 2004-2012 private units End 2012 Starts: Inner up 42% Outer down 21% *Private residential DOWNLOAD REPORT HERE
  • 35. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2,000 4,000 6,000 8,000 10,000 12,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 OuterLondon construction starts 2004-2011 private units Inner London construction starts 2004-2011 private units End 2011: Starts: Inner borough up 7%. Starts: Outerup 53% *Private residential DOWNLOAD REPORT HERE
  • 36. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2,000 4,000 6,000 8,000 10,000 12,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 Outer London construction starts 2004-2012 private units Inner London construction starts 2004-2012 private units End 2012 Starts: Inner up 42% Outer down 21% *Private residential DOWNLOAD REPORT HERE
  • 37. The reversal of fortune due to •scarcity of mortgage availability •abundance of foreign equity During 2011 equity was chasing super-prime existing stock. It seems now that that stock is slowly being exhausted and to cater for the continuing demand developers are building again and they are building prime. We could just have carried on here and said... *Private residential DOWNLOAD REPORT HERE
  • 38. The reversal of fortune due to •scarcity of mortgage availability •abundance of foreign equity During 2011 equity was chasing super-prime existing stock. It seems now that that stock is slowly being exhausted and to cater for the continuing demand developers are building again and they are building prime. Housing...) *Private residential DOWNLOAD REPORT HERE
  • 39. A case study DOWNLOAD REPORT HERE
  • 40. 100 Middlesex Street Denning Point A Tale of Two Developments DOWNLOAD REPORT HERE
  • 41. 100 Middlesex Street Denning Point DOWNLOAD REPORT HERE
  • 42. 100 Middlesex Street Denning Point DOWNLOAD REPORT HERE
  • 43. 100 Middlesex Street Denning Point DOWNLOAD REPORT HERE
  • 44. 100 Middlesex Street Denning Point DOWNLOAD REPORT HERE
  • 45. 100 Middlesex Street Denning Point Middlesex Street Commercial Street DOWNLOAD REPORT HERE
  • 46. 100 Middlesex Street Denning Point Nido Cityscape 1,204 student unitsDOWNLOAD REPORT HERE
  • 47. 100 Middlesex Street Denning Point Nido Cityscape 1,204 student units 128 private units
  • 48. 100 Middlesex Street
  • 49. But could it be that the very factors discouraging the developmentof student accommodation in the inner boroughs could fuel it in the outerboroughs? Let’s take a look at those factors
  • 50. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS Inner and Outer borough pipeline
  • 51. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS 9,100 units in the inner planning pipeline – applications & permission combined
  • 52. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS 10,224 units in the outer planning pipeline – applications & permission combined
  • 53. Both sectors have a similar potential what differentiates them is how close that potentialis to delivery
  • 54. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS The pipeline seems to suggest two things. Firstly, that supply in the inner boroughs is becoming exhausted
  • 55. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS Secondly that developers are gearing up to tap in to a secondary market in the outer boroughs
  • 56. But why so much latent potential in the outerboroughs?
  • 57. emergence of a 3 tier system of provision
  • 58. 1. Offering International students a more affordable choice
  • 59. 2.Providing off-site accommodation for inner London universities e.g....
  • 60. Kodak Land Sec 220 student housing units spec build WestminsterUniversity and UCL have shown early interest in the units for their students.
  • 61. 3. Satellitecampuses complete with teachingfacilities and accommodation
  • 62. Imperial College’s Imperial West BBC site Wood Lane “lock, stock and barrel” 600+ student units(already) plans for a research & commercial facilities to come a complete purpose built self-contained entity SYNERGY
  • 63. But there could be an extralevel
  • 64. A 4thlevel fuelled by the very factors inhibiting growth in the innerboroughs
  • 65. Let’s have...
  • 66. Nigel Evans - team leader Another LOREMA Recap
  • 67. £psf values across the capital investor activity expandingfrom the super-prime core to the prime fringe
  • 68. £psf values across the capital If demand increases to such an extent that investors venture in numbers beyondthat boundaryinto traditional owner-occupier territory ...
  • 69. £psf values across the capital could lead to increased demand for rented stock which in turn could push prices upwards in the private rented sector.
  • 70. in the outer boroughs bespoke student housingcould become an increasingly attractive option for the domestic student.
  • 71. Why live in a shared house when you can have free wifi gym facilities concierge laundry service Security for the same price?
  • 72. Recap: Inner boroughs: Supply being exhaustedbut not replaced due to a shift in focus by developers to super-prime
  • 73. Recap: Outer boroughs: Will cater for an increasingly diverse group of students both international and domestic
  • 74. Recap: Outer boroughs: emergence of super satellite universities complete with accommodationand teaching facilities
  • 75. And finally: It seems that the future of student housing is all about the outer boroughs, but...
  • 76. Let’s just take another look at the inner borough pipeline graph again.
  • 77. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS The numberof applications may be diminished
  • 78. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS The numberof applications may be diminished
  • 79. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Inner pipeline Outer pipeline App PPG INNER BOROUGHS OUTER BOROUGHS but the permission pipeline remains strong
  • 80. 7,000 unit strong
  • 81. but as long as the influx of cash from overseas persists student housing will continue to take a back seat to super-prime residential
  • 82. As long as the influx of cash from overseas persists
  • 83. Nigel Evans - team leader When that bubble bursts Will it be student housing that saves the day. Again?
  • 84. Nigel Evans - team leader The Digital edition
  • 85. The start of this presentation same each year 180,000 applications, 6,000 site visits, 20,000 schemes on the database etc... Of those 20,000 schemes some 3,000are either lapsed, withdrawn or refused, But, if this digital edition is about anything it’s about visualisation Let’s not say how vastthe database is let’s visualise it This is what 3,000 schemes looks like
  • 86. Policy 3.8 of the London Plan seeks to ensure that strategic local requirements for student housing are addressed, without compromising capacity to meet the need for conventional dwellings, especially affordable family homes.
  • 87. A lucky dip All these sites have at one point been in the planning system, each site was once thought to have development potential, each one could have again
  • 88. The LOREMA Student Housing Update In-box Tomorrow LOREMA Main Report
  • 89. Nigel Evans – Head of London Residential Research LOREMA UPDATE: STUDENT ACCOMMODATION 2013 DOWNLOAD REPORT HERE
  • 90. Nigel Evans – Head of London Residential Research DOWNLOAD REPORT HERE