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M&G Investments said on Monday it has completed 2,350 new student rooms ahead of the start of the new academic year.

More than half – 1,500 – have been built at Swansea University’s new Bay Campus, M&G noted.

The group has so far invested £380 mln (€520 mln) in the student housing sector, sourcing equity primarily from UK pension funds and institutions with similar long-term investment horizons.

Other accommodation under construction includes 417 beds for the Royal College of Music in London at a cost of £36.9 mln, while 602 beds at Bangor University in Wales and 324 beds at the University of St Andrews in Scotland, costing £37.4 mln and £26.8 mln respectively, have been completed for the new academic year.

M&G is now on course to provide accommodation for more than 6,000 students following its first investment in Bristol in 2009.

'Like corporates who previously relied on banks for financing, universities have also had to adjust to the new financing landscape that emerged following the 2008 crisis,' said Ben Jones, head of real estate income at M&G Investments. 'Pension fund and institutional investors, who can provide long-term financing in different forms, are increasingly investing in the sector.'

Traditionally, universities have accessed the capital markets via the bond or private placement markets but there has been a significant trend in universities using alternative financing structures in order to build new student accommodation, added Jones. 'The most prominent new trend is investment in student accommodation through long-lease structures, which gives investors inflation-linked income over the long term. It is an attractive option for universities to gain long-term financing for the construction of student accommodation while retaining the freehold ownership of the land.'