Scotland’s Strategic Shift to Meet Growing Demand for Student Accommodation
As Scotland’s student population continues to grow, driven by both domestic and international enrolments, the demand for purpose-built student accommodation (PBSA) has reached a critical point. In response, developers are stepping up to the challenge, unveiling a remarkable pipeline of new projects nationwide.
The Urgent Need for Solutions
Glasgow, Scotland’s largest city, is the clearest indicator of the accommodation crunch. In the 2023-24 academic year, virtually all PBSA in Glasgow was booked up as early as February 2023, highlighting the urgent need for long-term solutions.
“When looking north of the English border, almost all purpose-built student accommodation (PBSA) in Scotland’s biggest city, Glasgow, was booked up for the 2023-24 academic year as early as February last year, signalling an urgent need for long-term solutions,” said Chris McLeish, Partner within Morton Fraser MacRoberts’ commercial real estate team.
Developers Step Up in Glasgow
Developers are now stepping up to bridge this growing gap in student housing. In late 2023, Unite Students announced an agreement to acquire an 800-bed student accommodation development in central Glasgow to cater to students arriving for the 2026/27 academic year.
Student accommodation provider Alumno was also granted planning permission for a new 262-bed, six-storey development in central Glasgow.
“Continuing with the example of Glasgow, at the end of last year, Unite Students announced it has agreed to acquire an 800-bed student accommodation development in central Glasgow, catering to students arriving for the 2026/27 academic year. Moreover, in December, student accommodation provider Alumno was granted planning permission for a new development in central Glasgow – a six-storey building set to accommodate 262 students,” McLeish explained.
The Pipeline Expands Across Scotland
The development activity is not limited to Glasgow. In Aberdeen and Dundee, Scottish investor Together recently funded the acquisition of 850 student beds by ATK Property Group, taking advantage of the PBSA supply and demand dynamics.
Dundee has also seen numerous PBSA schemes obtain planning consent, including an eight-storey, 215-bed development on the former Liquid/Mardi Gras Nightclub site.
“Furthermore, several other significant schemes in Glasgow are either awaiting determination or currently in consultation, including Watkin Jones Group’s 784-bedroom scheme at Charing Cross and MRP Land’s 492-bedroom scheme at Renfield Street. As of February 2024, it was reported that there is a £200m funding pipeline of PBSA schemes in Glasgow that will deliver 1,200 student beds, which is extremely positive for the sector.”
Edinburgh Sees PBSA Growth
The Scottish capital, Edinburgh, is also witnessing a growing PBSA pipeline. Last year, the City of Edinburgh Council granted planning permission for Host Student Housing’s 289-bed development. Additionally, it was reported that Hub and Bridges Fund Management were in the forward fund market for an investor to finance its 632-bed development, reportedly the largest PBSA scheme to be consented to in Edinburgh.
Further investment news continues to emerge, with Vita obtaining consent for a 267-bed development and Alumno securing approval for a 191-bed scheme at London Road following an appeal.
“In the Scottish capital, pipelines are also starting to grow. Last year, the City of Edinburgh Council granted planning permission for Host Student Housing’s plan for a new 289-bedroom development. Moreover, it was reported that Hub and Bridges Fund Management was in the forward fund market for an investor to finance its 632-bedroom development, reportedly the largest PBSA scheme to be consented to in Edinburgh. News of further investment is not slowing down – in recent weeks, it was announced that Vita has obtained consent for a 267-bedroom development and Alumno for a 191-bedroom scheme at London Road following appeal.”
A Shifting Landscape for PBSA Investments
The surge in PBSA development projects reflects a significant shift in the perception of these assets. A decade ago, PBSAs were viewed as risky propositions for investors, but now they are seen as mainstream assets offering attractive rewards.
“A decade ago, PBSAs were seen as risky propositions for investors, but now, thanks to their growing demand, they are seen as mainstream assets, offering attractive rewards.”
Addressing the Ongoing Challenges
While the development response is encouraging, the article raises concerns about whether the pace and scale of these initiatives will be sufficient to meet Scotland’s ever-increasing student housing demand.
“While this has encouraged a surge in development projects, which is a positive sign, the scale and speed of these initiatives may still fall short of the increasing demand as, on average, completed products will not be seen until at least 2026.”
“Furthermore, the focus on large cities might overlook the accommodation needs in smaller towns and rural areas with educational institutions. The strategy should ideally be inclusive, ensuring that students across Scotland have access to quality and affordable housing. Still, student demand, funder appetite and rental levels on offer will inevitably dictate developer interest.”
As Scotland’s student population grows domestically and internationally, the need for a comprehensive and strategic response to the student housing crisis remains crucial. The current wave of PBSA developments marks a significant shift, but the test will be whether these efforts can keep pace with the evolving demand.
News Summary:
Scotland is facing a critical shortage of student accommodation, particularly in major cities like Glasgow. Developers have responded by announcing a surge of new purpose-built student housing projects, with over £200 million in funding and 1,200 new beds planned in Glasgow alone. Similar developments are underway in other Scottish cities, including Aberdeen, Dundee, and Edinburgh. While this is a positive shift, the article questions whether the scale and speed of these initiatives will be sufficient to meet the growing student population in Scotland, both domestic and international. Ensuring affordable and accessible accommodation with educational institutions across smaller towns and rural areas remains an ongoing challenge.
