Conygar’s latest student scheme performing ‘well below’ target
The Conygar Investment Company has said occupancy and income from its latest student accommodation project is running “well below” target as market demand falls and competition rises.
In results for the year to 30 September, Conygar said 371 students have moved into Winfield Court, a 693-bed student housing development in the company’s Island Quarter in Nottingham, since practical completion in the summer. That represents 54% of the total rooms available.
“The current occupancy rate, and net operating income of approximately £1.5m, are well below our fully stabilised targets for this property but have arisen in this first year from a combination of factors,” said chief executive Robert Ware and chairman Nigel Hamway in a joint statement.
The Conygar Investment Company has said occupancy and income from its latest student accommodation project is running “well below” target as market demand falls and competition rises.
In results for the year to 30 September, Conygar said 371 students have moved into Winfield Court, a 693-bed student housing development in the company’s Island Quarter in Nottingham, since practical completion in the summer. That represents 54% of the total rooms available.
“The current occupancy rate, and net operating income of approximately £1.5m, are well below our fully stabilised targets for this property but have arisen in this first year from a combination of factors,” said chief executive Robert Ware and chairman Nigel Hamway in a joint statement.
“These include much-publicised measures, introduced in January 2024, to tighten the issue of student visas, which have materially impacted the number of overseas students attending UK universities in the current year. Furthermore, competing local student accommodation providers, also seeking to let their newly constructed developments for the first time, were offering unexpectedly competitive rental and incentive packages.”
But the pair added that “underlying fundamentals” for purpose-built student accommodation “remain strong”.
“Continuing healthy demand for higher education and expectations of rental growth support the anticipated uplift in investment activity for this sector over the coming years,” they said. “As such, we would anticipate a material uplift in lettings and net operating income for the next academic year. Furthermore, on 11 December 2024 we received credit approval from Barclays to restructure and extend the development loan, secured against Winfield Court, to enable its further letting and stabilisation over the current academic year.”
The company posted a loss of £34m owing to a £28.3m reduction in the property carrying values for the Island Quarter. Conygar has submitted a detailed planning application for the second phase of student accommodation and in May acquired the long-leasehold interest of the site occupied by Virgin Active gym.
“Against a perpetually challenging backdrop we have continued to make steady progress, in particular at our mixed-use development site at [the Island Quarter],” said the company’s top team. “However, the delayed reduction of interest rates, compounded by a subdued investment market, have materially impacted our further progression and results for the year.”
Photo © Conygar Investment Company
