UK-based iQ, currently owned by US investment bank Goldman Sachs and health research charity Wellcome Trust, has been bought by the US-based private equity firm Blackstone.
iQ is one of the largest student housing firms in the UK, currently owning 67 residences in 27 towns and cities across the country housing over 28,000 students. 52% of iQ’s portfolio is in London, where it is the largest provider of student accommodation. In Newcastle, iQ operates Stephenson House on Stoddart Street in Shieldfield close to the Northumbria campus and the Collingwood site close to Manors Metro.
The rising demand for student housing has made this a particularly lucrative market for investors. It has been reported that there were fewer than 650,000 student accommodation beds for a total of 1.8 million students in the UK last year, and only 32,000 new beds were provided across the UK last year. Of these, almost 90% were provided by private sector accommodation companies rather than university-owned halls. The number of full-time students in the UK is projected to increase further, with experts estimating that the figure will grow by 461,000 by 2030 to reach a total of 2.2m students. This is primarily due to a projected rise in international students, who are expected to constitute 45% of the total.
This high demand has seen rents rapidly rise, with those for en-suite accommodation increase by 16% above the rate of inflation since 2014 according to a 2019 report by Cushman & Wakefield. A report published last year by the National Union of Students detailed how on average rent now accounts for 73% of the maximum student loan, while the proportion of studio accommodation has more than doubled since 2012/13.
For 2019, Newcastle University accommodation ranged from £84.14 per week for a self-catered room with a shared bathroom at St Mary’s, to £175.63 for a catered room with en suite facilities at Castle Leazes. Park View is the University’s newest build, and caters for the largest proportion of first years, with en-suite rooms costing £137.13 a week. From September 2020, the St Mary’s site will be no longer available for students. The University furthermore offers accommodation through a range of managed partnership agreements with private providers, including Liberty Plaza, Newgate Court, The View and Turner Court,
Blackstone first ventured into student accommodation when it created Nido with the developer Generation Estates in 2007. Nido now owns three accommodation sites across Newcastle: Union Square, Stepney Yard and The Bridge, and across the UK it caters for students from over 120 Higher Education institutions.
Currently 18% of purpose-built student accommodation is owned and operated by companies such as iQ, Downing Students and Vita, while universities own 18% and private rentals 42%.
