This guide runs through the student property investment opportunities in Preston. In it, you will discover the economic drivers behind Preston’s projected growth and the growing reputation of its university – the 8th largest in the UK.
It analyses the key drivers that continue to make this vibrant city a sought after destination, as well as introducing the University of Central Lancashire – an academic institution that has become the first modern British university to be recognised in the QS rankings.
- An overview of Preston
- The local economy
- The University of Central Lancashire
- The case for investing in student property
- Introducing Jubilee Court
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An overview of Preston
The Guild City of Preston lies in the heart of Lancashire and has a population of approximately 140,000. It traces its history back nearly 1,000 years and is a modern multicultural city built on the solid foundations of the industrial revolution.
Preston boosts two large modern indoor shopping malls in the form of St. Georges and Fishergate, and 2 large retail parks. It is also home to Preston North End FC, one of the founder members of the football league. They were the first team in the UK to win the league and cup double, doing so at the end of the first year of the league in 1888.
Preston is a green city, with Avenham Park’s green flag award recognition that it is one of the best green spaces in the country. The Guild Wheel, a scenic 21-mile cycling greenway connects the city to the picturesque Lancashire countryside, while the Lake District is also close by. UCLan is also one of only 5 universities in the UK to hold both ISO14001 certification and the Carbon Trust Standard.
The local economy
Preston is a medium-sized city and the administrative centre of Lancashire a county with a £25.5 billion economy that supports nearly 650,000 jobs. Equipped with a competitive cost base and good location near to Manchester and Liverpool, Preston is the engine room of Lancashire’s economy and one of the largest local economies in the north of the UK. The region is important to the country’s agricultural, nuclear and advanced manufacturing sectors, with leading local employers that include:
- UCLan – the biggest employer in Preston
- BAE Systems – the fourth largest global defence contractor
- Eric Wright Construction – a key player in the building industry
- InBev – a multinational brewery group
- EDF & Westerling Electric Company (formerly BNLF)
- Leyland Trucks – one of Britain’s leading manufacturing companies
With 4 nearby motorways and London just over 2 hours away by train, there are few locations in the UK with better transportation links. The enterprising economic culture of Preston and Lancashire creates a fertile investment environment and Preston makes a significant contribution to national performance:
- 3rd best performing city in the UK for private sector growth in the decade leading up to 2008
- The 6th top performing city for growth in 2013 – Good Cities for Growth Index
- Attracted more overseas investment in the first quarter of that year than anywhere in the UK outside of the capital
Strong development initiatives
Preston has been reinventing itself since 1179 and continues to do so. With the government’s economic strategy using cities to drive regional growth, it received an enormous boost to its economic growth aspirations with the recent announcement of the Preston, South Ribble, and Lancashire City Deal. Highlights of this include:
- £430 million directly invested into Central Lancashire
- Expansion of transport and business infrastructure around Preston
- Creation of 20,000 new jobs and 17,000 new homes
- Stimulating a further £2.3 billion worth of local investment
With the City Deal already underway, adviser to the UK Prime Minister, Sir Michael Heseltine commented, “It’s fantastic to see the rapid progress that has been made in Preston, South Ribble and Lancashire over the last six months. The City Deal has given the area the opportunity to unlock significant economic growth and leverage considerable commercial investment.”
Preparations have already begun to catalyse economic growth in Preston. The building blocks for further growth include:
- BAE’s £12.4 million investment program at the Lancashire Enterprise Park
- Lancashire Enterprise Zone – will attract 13,000 high value jobs and be one of the largest manufacturing hubs in Europe
- European Social Fund training programme for 4,000 young local SME employees
- Lancashire Growth Hub – a specialist business advice centre
- UCLan’s 36,000 strong community of students and professionals, contributing £300 million to the local economy annually
The University of Central Lancashire
The University of Central Lancashire (UCLan) was founded in 1828, when it was known as the institution for the Diffusion of Knowledge. UCLan has a distinguished global reputation. Highlights of this include:
- The first modern university in the UK to feature in the QS world rankings in 2010
- Top modern university for student experience – The Times 2010
- A top 1% global university for the number of international students
- One of the fastest climbers in rankings – Guardian University Guide 2015
- All 16 research disciplines recognised for quality – Research Excellence Framework
- World-class academic and sports facilities
- A partnership network extending to 125 countries
- Students from 120 different countries.
The University offers in the region of 500 undergraduate and 200 postgraduate courses. It is a leading seat of learning in terms of developing degrees in the emerging disciplines of fashion, forensics, journalism, and sporting science. It continues to be instrumental in creating career prospects in the professions of architecture, astrophysics, and pharmacy. UCLan has also launched the first new School of Dentistry in the UK in over a century and its researchers are working with NASA on a project that is photographing the sun.
Large-scale campus redevelopment
UCLan has recently spent £100 million upgrading its buildings, teaching technology and sporting facilities. A further indication of its ambition, the university has in the last few weeks also announced proposals for the investment of a further £200 million that will comprehensively transform its Preston campus over the next 10 years. This includes:
- A £30 million Engineering Innovation Centre
- Landscaping of the campus and surrounding area
- Development of student faculty buildings
- Improving roads on and around the campus
This project will create a world-class campus environment while also stimulating the local economy and creating jobs. As Babs Murphy, Chielf Executive of the North and Western Lancashire Chamber of Commerce said, “The economic role played by an expanded and strengthened University will aid our regeneration efforts by bolstering the local economy and underpinning long-term sustainable economic growth.”
Student life in UCLan and Preston
The student body at UCLan totals approximately 30,000 students per annum. Because of its high standing in the world University community, UCLan is the chosen seat of learning for international students from 120 different countries and the university works to promote a healthy, proactive, multicultural environment.
UCLan is the 8th largest university in the UK but its student population is critically undersupplied by its halls of residence accommodation. The available 2,200 beds are consequently limited to first year students. Prices range from £79 to £107.80 and the rooms are relatively modern, having all been built in the last 20 years.
UK and overseas students – the statistics
The United Kingdom hosts more overseas students than any other country apart from the US, and their number is growing faster than anywhere but Australia.
Preston is an excellent city for students. Although small by some city standards (the total population is 140,000) the fact that 32,000 students study at UCLan means that students are a large part of everyday life here in the city. Students are welcomed with open arms as an important part of the city’s modern heritage, and a major contributor to its booming economy.
With a strong sense of ethnic diversity, student social life is spread throughout the city, underpinned by the success of the local economy, boosted by the recent injection of capital from the Preston and Lancashire City Deal. There are plenty of great open green spaces here in Preston, and the Guild City also has two markets; the outdoor (covered) market at Market Street, and the indoor market at Liverpool Street.
The case for investing in student property
Purpose Built Student Accommodation (PBSA) offers lucrative investment yields. While many assets in alternative industry sectors are underperforming, PBSA has grown into the top performing asset in the UK over the last 3 years according to Savills.
Globally, investment in student housing has risen from $3.4 billion to $7.2 billion between 2007 and 2013. Although it is mostly institutional investors that have led worldwide investment (accounting for more than 57% in terms of overall sales volume), the private sector is claiming an ever larger share of the market.
On the world stage the higher education sector is currently being valued at approximately $164 billion, and predictions are that this figure will reach $200 billion in the next 10 years.
Specifically, in terms of international students domiciled in foreign countries while they study, their numbers during the next decade are expected to reach 3.9 million. In the UK, this population has doubled in size in the last ten years and Knight Frank predicts growth of up to 20% over the next 5 years.
Reliable high yields
Purpose Built Student Accommodation, rather than converted premises, offers buyers a reliable earning potential. Even though the rental contracts are relatively short-lived, these properties are always in high demand and are currently still woefully undersupplied. With international student numbers expected to continue growing alongside a limited number of new PBSA developments in the pipeline, PBSAs are expected to remain a lucrative investment option for the foreseeable future.
As far as the predicted increase in mobile international students is concerned, we are seeing more and more students looking for luxury accommodation. The student property sector, which traditionally has focused its attention on domestic students, is lagging behind as regards gearing up for the larger number of more discerning international students.
Introducing Jubilee Court
University cities such as Preston Guild City will be at the forefront of the increase in international student numbers; thanks in part to the high world ranking of UCLan and to the attractions of the location itself. The recent injection of capital through the Preston and Lancashire City Deal will boost the local economy creating employment opportunities for post graduates.
Knight Frank estimates that an average of 26% of students have access to purpose built student accommodation across the UK. At 17%, Preston is sitting well below the national average, and it will continue to do so even with a 50% in the number of designated rooms available. This means that Preston has one of the highest demand levels of Purpose Built Student Accommodation in the country, something that will ensure sustained demand for rooms.
Jubilee Court provides students with a accommodation option at the top end of the market in Preston. It is a 2-minute walk away from UCLan’s Preston campus and will have a comprehensive range of onsite facilities perfectly conducive to studying and socialising, maximising the university experience of residents.
The development offers investors a unique opportunity to buy a student room that will stay in high demand for the foreseeable future, allowing for bite sized entry into the UK property market.
Modern students have higher expectations with regard to accommodation than in the past, and are backed by the funding necessary to be discernible. Emerging Property is well-positioned to take advantage of this demand, and to help investors to capitalise on this market through in-depth industry analysis and a proven track record.