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Presentation to launch the London Residential Research report Student Accommodation 2013. The report itself is available to download and has a range of interactive graphs and tables.
Citation preview
Nigel Evans – Head of London Residential Research
LOREMA UPDATE:
STUDENT ACCOMMODATION 2013
Nigel Evans - team leader
Headlines
LOREMA UPDATE:
STUDENT ACCOMMODATION 2013
Nigel Evans - team leader Rates
These are the various rates at which
applications submitted
permissions granted
construction started
each year up to and including H1 2013
DOWNLOAD REPORT HERE
Essentially a measure of pipeline activity...
DOWNLOAD REPORT HERE
...this is how that pipeline
looked like pre 2007 pre-Lehmannot particularly impressive
not particularly active2004 2005 2006 2007 2008 2009 2010 2011 2012 End
2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission Starts
DOWNLOAD REPORT HERE
But, in the dark days that were to follow,
student housing saved the day...
This is what saving the day looks like...
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission Starts
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission Starts
An almost
instant response
DOWNLOAD REPORT HERE
more
applications...
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000 ApplicationApplication
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission
More
permissions
granted
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Starts
More
starts
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission Starts
and from 2009 to
2012 an almost exact correlation between
permission rates and construction
starts
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
2000
4000
6000
8000
10000
12000
14000Application Permission Starts
With permissions being almost
immediately converted to construction starts. A dynamic state of affairs but...
DOWNLOAD REPORT HERE
same across the
whole of the
capital...?
DOWNLOAD REPORT HERE
Nigel Evans - team leader Inner & Outer Boroughs
DOWNLOAD REPORT HERE
far more activity in the inner boroughs,
more applications
more permissions
more starts
with near flat-line
conditions in the outer
boroughs.
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
Application Permission Starts
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Application Permission Starts
INNER BOROUGHS
OUTER BOROUGHS
DOWNLOAD REPORT HERE
requires closer inspection –
when data lines cross
as in the inner boroughs
(application and permission rates down but a surge in construction starts)
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
Application Permission Starts
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Application Permission Starts
INNER BOROUGHS
OUTER BOROUGHS
DOWNLOAD REPORT HERE
or they spike as in the outer boroughs
(going from 323 units in 2010 to 7,810 units submitted in 2012)
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
Application Permission Starts
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Application Permission Starts
INNER BOROUGHS
OUTER BOROUGHS
DOWNLOAD REPORT HERE
something of
significance is almost always behind it
(Let’s take a detailed look starting with the inner boroughs)
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
Application Permission Starts
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Application Permission Starts
INNER BOROUGHS
OUTER BOROUGHS
DOWNLOAD REPORT HERE
Nigel Evans - team leader Inner BoroughsDOWNLOAD REPORT HERE
The recent spurt in construction
starts, we estimate it could top
the 6,900 unit mark in the
inner boroughs by year end (estimated by doubling H1 2013 figures), points not only to
confidence
in the sector but also of
demand.
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000 Starts
DOWNLOAD REPORT HERE
However, in such a scenario we would expect the
application pipeline to show a
corresponding increase as well
2004 2005 2006 2007 2008 2009 2010 2011 2012 End 2013*
0
1000
2000
3000
4000
5000
6000
7000
8000 Starts
DOWNLOAD REPORT HERE
But in the case of student housing this is
simply not the case
DOWNLOAD REPORT HERE
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
Spot the inner borough application pipeline
INNER BOROUGHS OUTER BOROUGHS
DOWNLOAD REPORT HERE
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
Spot the inner borough application pipeline
INNER BOROUGHS OUTER BOROUGHS
Application pipeline
DOWNLOAD REPORT HERE
DOWNLOAD REPORT HERE
530 unitsabout the size of a medium sized student block
and that’s all that’s left...
DOWNLOAD REPORT HERE
This is a
pipeline
whose
foundations are being
eroded
but
not replaced DOWNLOAD REPORT HERE
If construction rates continue at the
same level as they have done post-Lehman then
the entire stock of
potential student housing in the inner boroughs could be
exhausted by the end of
2014
DOWNLOAD REPORT HERE
ironically
very forces
driving the student housing since 2007 now
risk slowing it down, albeit inadvertently.
Let’s take a closer look at those forces...
DOWNLOAD REPORT HERE
Nigel Evans - team leader LOREMA RecapDOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
2,000
4,000
6,000
8,000
10,000
12,000 Outer London construction starts 2004-2011 private units
Inner London construction starts 2004-2011 private units End 2011:
starts: Inner borough up 7%.
starts:
Outer up
53%
*Private residential
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
2,000
4,000
6,000
8,000
10,000
12,000Outer London construction starts 2004-2012 private units
Inner London construction starts 2004-2012 private units
End 2012
Starts:
Inner up
42%
Outer down
21%
*Private residential
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
2,000
4,000
6,000
8,000
10,000
12,000 Outer London construction starts 2004-2011 private units
Inner London construction starts 2004-2011 private units End 2011:
Starts: Inner borough up 7%.
Starts:
Outer up
53%
*Private residential
DOWNLOAD REPORT HERE
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
2,000
4,000
6,000
8,000
10,000
12,000Outer London construction starts 2004-2012 private units
Inner London construction starts 2004-2012 private units
End 2012
Starts:
Inner up
42%
Outer down
21%
*Private residential
DOWNLOAD REPORT HERE
The reversal of fortune due to
• scarcity of mortgage availability
• abundance of foreign equity
During 2011 equity was chasing super-prime existing stock.
It seems now that that stock is slowly being exhausted
and to cater for the continuing demand developers are
building again and they are building prime.
We could just have carried on here and said...
*Private residential
DOWNLOAD REPORT HERE
The reversal of fortune due to
• scarcity of mortgage availability
• abundance of foreign equity
During 2011 equity was chasing super-prime existing stock.
It seems now that that stock is slowly being exhausted
and to cater for the continuing demand developers are
building again and they are building prime.
(instead ofstudentHousing...) student
*Private residential
DOWNLOAD REPORT HERE
A case study
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
A Tale of Two Developments
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
Middlesex Street
Commercial Street
DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
Nido
Cityscape
1,204 student units
2008 DOWNLOAD REPORT HERE
100 Middlesex Street Denning Point
Nido
Cityscape
1,204 student units
128 private units
2008
2012
100 Middlesex Street
Student housing NOW?
But could it be that the
very factors discouraging the
development of student accommodation in the
inner boroughs could
fuel it in the
outer boroughs?
Let’s take a look at those factors
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
Inner and Outer borough pipeline
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
9,100 units in the inner planning pipeline – applications & permission combined
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
10,224 units in the outerplanning pipeline – applications & permission combined
Both sectors have a
similar potential
what differentiates them is
how close that
potential is to delivery
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
The pipeline seems to suggest two things.
Firstly, that supply in the
inner boroughs is becoming exhausted
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
Secondly
that developers are gearing up to tap in to a
secondary market in the outer boroughs
But why so much
latent potential in the
outer boroughs?
emergence of a
3 tier system
of provision
1. Offering International students a more affordable choice
2. Providing off-site accommodation
for inner London universities
e.g....
Kodak
Land Sec220 student housing units
spec buildWestminster University and UCL
have shown early interest in the units for their students.
3. Satellite campuses
complete with teaching facilities
and accommodation
Imperial College’s Imperial West BBC site Wood Lane
“lock, stock and barrel”
600+ student units (already)
plans for a research & commercial facilities to comea complete purpose built self-contained entity
SYNERGY
But there could be an extra level
A 4th level fuelled by
the very factors inhibiting growth in the
inner boroughs
Let’s have...
Nigel Evans - team leader Another
LOREMA Recap
£psf values across the capital
investor activity
expanding from the
super-prime core to the
prime fringe
£psf values across the capital
If demand increases to such an extent that
investors venture in numbers beyond that
boundary into
traditional owner-occupier territory ...
£psf values across the capital
could lead to increased demand for rented stock which
in turn could push prices upwards in the private rented sector.
in the outer boroughs
bespoke student housing could become
an increasingly attractive option
for the domestic student.
Why live in a shared house when you can have free
wifigym facilities
conciergelaundry service
Securityfor the same price?
Recap:
Inner boroughs:
Supply being exhausted but not replaced due to a shift in
focus by developers to super-prime
Recap:
Outer boroughs:
Will cater for an increasingly diverse group of students both
international and domestic
Recap:
Outer boroughs:
emergence of
super satellite universities complete with
accommodation and
teaching facilities
And finally:
It seems that the future of student housing is all
about the outer boroughs, but...
Let’s just take another look at the inner borough pipeline graph again.
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
The number of applications may be diminished
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
The number of applications may be diminished
Inner pipeline Outer pipeline0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
App PPG
INNER BOROUGHS OUTER BOROUGHS
but the permission pipeline remains strong
7,000 unit strong
but as long as
the influx of cash from overseas persists
student housing will continue to take a
back seat to
super-prime residential
As long as the
influx of
cash from
overseas
persists
Nigel Evans - team leader
When that bubble bursts Will it be student housing
that saves the day.Again?
Nigel Evans - team leader
The Digital edition
The start of this presentation same each year
180,000 applications, 6,000 site visits, 20,000 schemes on the database etc... Of those 20,000 schemes some
3,000 are either lapsed, withdrawn or refused,
But, if this digital edition is about anything it’s about
visualisation
Let’s not say how vast the database is
let’s visualise it
This is what 3,000 schemes looks like
Policy 3.8 of the London Plan seeks to ensure that strategic local requirements for student housing are addressed, without compromising capacity to meet the need for conventional dwellings, especially affordable family homes.
A lucky dip
All these sites have at one point been
in the planning system,
each site was once thought to have
development potential, each one
could have again
The LOREMA Student Housing Update
In-box Tomorrow
LOREMA Main Report
Nigel Evans – Head of London Residential Research
LOREMA UPDATE:
STUDENT ACCOMMODATION 2013
DOWNLOAD REPORT HERE
Nigel Evans – Head of London Residential Research
DOWNLOAD REPORT HERE
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