Private Equity company Blackstone are scheduled to build a new residential Tower block in the City of London, not for bankers and financiers, but for students, mainly from overseas. The company have been involved in the UK student housing market for four years now, and have invested over £400 million in the booming market. Despite the worst recession for a generation, rents for premium student housing in desirable areas have been rising, fueled by wealthy overseas students.
Stuart Grant of the company said that “there is a chronic imbalance between supply and demand in this sector”, and pointed to occupancy rates of 99%. As a comparison, city of London office space occupancy rates are closer to 90%. Rents have been rising at 5% annually for the last six years in student accommodation, where as in other areas of commercial property they have risen at less than 0.6%