Post by scepticalinvestor on Mar 29, 2024 8:49:25 GMT
This makes an interesting read if you’re interested in the PBSA sector in general. It’s an excerpt from the latest valuation of one of my P2P investments, this is a PBSA building in Huddersfield that’s now valued at about 2/3 of what it was in 2018.
Mind you, I think the current valuation is unlikely to be achieved, given the huge oversupply in the Huddersfield PBSA market and the fact that there are blocks of similar age that failed to find a buyer and we’re sold dirt cheap as development land.
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Market Analysis
There has been a decrease in student admissions to Huddersfield University, especially in overseas students (currently approx. 2,000 students), who are the primary user of Purpose-Built Student Accommodation (PBSA) as they tend to have less knowledge of HMO markets.
This coupled with a rise in the number of PBSA units to approximately 4,400 beds has led to oversaturation in the market.
One PBSA block, HD1 (Prestige Student Living), originally designed for students, has been repurposed to accommodate asylum seekers, despite its “luxury” studio status.
Historically, Unite, a large PBSA operator, pulled out of the Huddersfield market and an operator of three blocks in the city went into administration.
Two PBSA units which were run down and struggling to let were sold off market for £5,000 per bed, likely as development land.
Overall, currently there is not a positive outlook for the Huddersfield PBSA market.
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Mind you, I think the current valuation is unlikely to be achieved, given the huge oversupply in the Huddersfield PBSA market and the fact that there are blocks of similar age that failed to find a buyer and we’re sold dirt cheap as development land.
————
Market Analysis
There has been a decrease in student admissions to Huddersfield University, especially in overseas students (currently approx. 2,000 students), who are the primary user of Purpose-Built Student Accommodation (PBSA) as they tend to have less knowledge of HMO markets.
This coupled with a rise in the number of PBSA units to approximately 4,400 beds has led to oversaturation in the market.
One PBSA block, HD1 (Prestige Student Living), originally designed for students, has been repurposed to accommodate asylum seekers, despite its “luxury” studio status.
Historically, Unite, a large PBSA operator, pulled out of the Huddersfield market and an operator of three blocks in the city went into administration.
Two PBSA units which were run down and struggling to let were sold off market for £5,000 per bed, likely as development land.
Overall, currently there is not a positive outlook for the Huddersfield PBSA market.
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