UK student accommodation could be revalued downward again at the close of the year — but investors and developers in the market are hoping that will signal the bottom for a sector where income is proving more resilient than some might imagine. 

“I genuinely think we are at the bottom of the cycle right now,” Harrison Street Asset Management Managing Director and European CEO Paul Bashir told the audience at Bisnow’s Student Accommodation Summit. 

“I think through an inflection of valuations, banks getting a little bit more aggressive and GPs having more realistic estimations on where value is, I think we're going to start to see more transactional activity.”

The discount to net asset value at which listed owners of student accommodation like Unite are trading implies there could be a downward revision when year-end valuations come in, Bashir said. 

But to some degree, a downward movement would reflect the fact that yields in the student sector have remained low even as interest rates have risen over the past three years, said Huw Forrest, JLL head of UK student housing and living capital markets.

"Pricing is adjusting. It has adjusted quite a long way,” Forrest said. “It hasn't necessarily crystallized into those valuations, but I do feel that we are hopefully bouncing along the bottom.”

A spread remains between seller and buyer expectations on price, and that is reflected in a stark slowdown in investment volumes in the second quarter of the year. 

Just £121M of deals were completed, JLL data showed, the lowest quarterly figure in more than a decade. The Q1 figure was £2.2B, well above the five-year average, albeit the stats were padded by the £723M purchase by Unite of listed peer Empiric. 

Core investors are nowhere to be seen, given that government bonds are yielding 5%-plus (albeit the price of bonds is going down at the moment rather than up). 

“It's the ones that need a bit of work, the refurbishment strategies, which we are after,” Aboria Capital Managing Director Issie Armstrong said. “That’s where we see the opportunity.”

Aboria, which is backed by the family office of the property grandee Downing family, has just completed its first deal, buying a five-asset, 1,570-bed portfolio for £165M in a joint venture that included private equity firm Partners Group, Downing and another family office. The plan is to refurbish and upgrade the properties, which are 98% let. 

The hope in the sector is that the bid-offer spread is narrowing, as a new word enters vendor lexicons — reality. 

Panellists at the event conceded that occupancy had slipped over the past few years, but that was a reduction from a very high level.

“I think we've all been very used to everything being 100% let,” GSA Global Head of Investor Solutions Paddy Allen said. “We’re probably now looking at more like 94%, 95%. It’s not a bad result, you just have to fight harder for your residents.”

Over the coming years, the student accommodation sector in the UK will need to evolve and embrace the midmarket, in contrast to its recent history as a premium product. That is partly because enrollment is declining among overseas students, the cohort most likely to rent top-end products. 

The number of international students studying in the UK in 2025, the last year for which there is official data, was 686,000, data from the Higher Education Statistics Agency showed, a 6% decline on the previous year. 

“I think there's a really interesting market there in terms of the refurbishment of first-gen space,” Watkins Jones Group Investment Director George Dyer said.

A huge number of beds need fire remediation works, ESG upgrades to improve their energy efficiency, or general room and amenity upgrades, he said. 

“And alongside that, I think we do see an opportunity there in terms of midmarket BTR and potentially a more affordable student model as well.”