The hunt for long-term diversified income is taking investors to some unexpected places. Multi-let industrial estates, budget hotels and purpose-built student accommodation are now rocking prospects for private equity.

According to newly-released data from Knight Frank, the PBSA sector is on course for a £3.2B boost from investors in 2019.

Some investors got there early, and are now reaping the rewards. One of them is Moorfield, whose 290-bed Birmingham Toybox student scheme at Bishopsgate Street has now reached on-site completion.

The forward-funded scheme in central Birmingham was developed by the Torsion Group, a privately owned development and construction company covering the student accommodation, care-to-residential and housing sectors.

Comprising 151 studio apartments and 139 en-suite cluster bedrooms spread across a 15-storey building, Toybox's communal spaces are designed to optimise effective studying, but also to massage students' sense of self-worth. Residents also get a gym and wellness studio and fibre optic WiFi broadband. The property is already fully let for this academic year.

Moorfield started investing in the student accommodation sector in 1998, in response to the significant gap in the market for affordable student accommodation. Since then, the company has developed and managed more than 6,000 student accommodation beds across the UK, including Printworks in Exeter and Century Square in Sheffield.

Knight Frank said the demographic bubble behind the growth of PBSA is gently deflating, although the proportion of young people going into higher education will rise. However, it warned that affordability is now increasingly important in the mind of UK-based students and their (mostly parental) funders.

Knight Frank analysis of official population projections, combined with analysis of university entry rates, points to a 15% increase in full-time undergraduate numbers between now and 2030. This would represent an increase of 220,000 to more than 1.7 million.

The increase in applications and acceptances for international students has been a key factor driving the type of new PBSA entering the market in recent years, with a focus on studio flats to cater to this international demand.

Yet as affordability pressures become more acute, especially among UK-based students, the mix of accommodation being built will change. Knight Frank predicts that 61% of new PBSA schemes due to be built for the 2019/20 academic year are en suite and cluster-led schemes, which typically command lower rents.