PURPOSE-BUILT STUDENT ACCOMMODATION

Purpose-Built Student Accommodation, Newcastle upon Tyne

Pilkington Real Estate was instructed to provide an independent Red Book-compliant valuation of a substantial purpose-built student accommodation investment in Newcastle upon Tyne for probate purposes. The valuation date was June 2024.

The property comprised a modern student accommodation scheme completed in 2012, providing approximately 134 en-suite student bedrooms arranged within cluster flats. The asset was situated within walking distance of two major universities and benefited from strong local student demand and established management arrangements.

Scope of Work

The instruction required:

Analysis of tenure and occupational arrangements.

Review of planning and statutory information.

Assessment of local student accommodation market conditions.

Detailed review of comparable student accommodation investment transactions.

Preparation of a Market Value for probate purposes in accordance with the RICS Valuation – Global Standards (Red Book).

Valuation Approach

Given the nature of the asset, the valuation was undertaken using an income capitalisation approach. This involved:

Assessing achievable rental income.

Reviewing occupancy levels and operating costs.

Analysing investor demand within the UK PBSA (Purpose-Built Student Accommodation) sector.

Benchmarking against comparable investment transactions across major university cities.

Challenges

The instruction required careful consideration of:

The property's mixed freehold and leasehold structure.

Ground rent liabilities and lease obligations.

Rapidly evolving student accommodation investment markets.

Changing interest rate expectations and investor sentiment during 2024.

The balance between operational performance and investment yield requirements.

Outcome

A detailed valuation report was prepared providing an independent opinion of Market Value for probate purposes, supported by market evidence, investment analysis and sector-specific research. The report enabled the trustees and their professional advisers to satisfy probate requirements and establish an appropriate value for estate administration.

Services Provided:

• RICS Red Book Valuation

• Probate Valuation

• Investment Property Valuation

• Student Accommodation Valuation

• Market Analysis & Comparable Evidence