Property Week | PBSA will be top of asset class
This article originally appeared in Property Week on 27 November 2020.
Only a few years ago, offices and retail dominated the upper end of the UK REIT market.
There was little competition until SEGRO came along, overtaking Landsec in 2018 as the UK’s largest REIT. But that was just the start.
The top of the public market is looking even more alternative now as Unite Group tussles with British Land for its place as the third-largest listed property company. At the time of writing, Unite is just marginally ahead in its market cap.
Unite’s place near the top illustrates a twofold story in student housing: the market is hungry for relatively high-yielding alternative assets with counter-cyclical qualities, but Unite has few listed peers because the asset class is still young and fragmented.
Private equity owns most purpose-built student accommodation (PBSA) assets, many of which are single buildings or small portfolios. The dynamics suggest the sector is ripe for consolidation and the public market can play a key role in the next stage of its growth.