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Edinburgh’s Student Sector a Major Attraction for Investors

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For one of the UK’s key cities and such a popular investment destination, Edinburgh is home to a surprisingly small population. With just half a million residents, the city is in many ways punching above its weight economically. There are a few key things that are helping to elevate Edinburgh’s profile beyond what you may expect for a city of its size, and one of these is its proportionally sizeable student population.

The city is home to one of the oldest universities in the English-speaking world, with the University of Edinburgh dating back to 1582, and today there are four respected universities to be found within the city. Collectively these generate a student population of around 60,000. In an age when the student property sector is growing rapidly, generating some of the best returns around, and has therefore become extremely popular with investors, this is a huge boon for the city from an investment standpoint.

The city’s popularity as a place to study is international in scope. Indeed, Edinburgh is a particularly favourite destination for students from overseas. The University of Edinburgh is ranked as one of the top 25 universities in the entire world, and approximately 40% of those studying in the city have come from abroad to do so.

This creates a sizeable student economy within the city. The most recent research suggests that Edinburgh’s universities generate around £3.3 billion for the UK economy. As for private sector investment, universities both invest directly and play a huge role in attracting individuals and institutions to invest as well.

Regarding direct investment, universities regularly and actively invest sizeable amounts into their estates strategies. Edinburgh Napier university plans to expand by around a fifth by 2020, and the University of Edinburgh’s cumulative capital spend on estates is expected to rise from its current £300 million level to as much as £1.5 billion by 2025.

The amounts of private sector investment generated by Edinburgh’s student economy are also sizeable. A large and growing number of students naturally translates into a large and growing demand base for student property, and this market is already struggling with lack of supply. Student property just happens to also be one of the UK’s most prominent and strong-performing asset classes right now, making a city as student-centric as Edinburgh an attractive prospect.

Private investors are enthusiastically putting capital into Edinburgh’s student housing market. Major purpose-built student developments are proving particularly popular. They provide an efficient solution to the shortage of quality housing for students, and an affordable and low-maintenance opportunity for investors, as well as being particularly popular with the international student community which accounts for 40% of Edinburgh’s student population.

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