EMPIRIC Student Property has highlighted the buoyancy of the student accommodation investment in Glasgow after making a fresh investment in the city.

The listed property company has agreed a £9.6 million deal to acquire the freehold of vacant office building close to the University of Strathclyde’s John Anderson campus in the city centre.

It is the latest in a series of acquisitions made by Empiric in Scotland this year, with the latest investment taking to 440 beds its presence in the Glasgow student accommodation market.

Empiric said it will develop the property, known as 155 George Street, into 87 self-contained studios, and one two-bed apartment.

It has commissioned Scottish firm KR Developments to work on the project.

The company told the stock market that it expects KR to be on site from the spring, with the scheme scheduled to be delivered in time for the start of the 2017/2018 academic year.

Empiric, which is classified as an internally managed real estate investment trust (REIT), said the full amount required for the investment will be invested in stages against development milestones.

The company said it will receive an income return from the developer on funds invested as the renovation project takes place.

Paul Hadaway, chief executive of Empiric Student Property, said: “This acquisition complements Empiric’s existing student accommodation assets in Glasgow, a city with 53,000 full-time students at five higher education establishments – the third largest student accommodation population in the UK outside London.

“Within the city 23 per cent of students are international and 21 per cent are post-graduates.

“Once all properties are complete, Empiric will own 440 operating beds in this Russell Group university city, which will help to drive further operational efficiencies and economies of scale. This acquisition is in line with Empiric’s investment criteria and returns profile.”

Empiric’s latest acquisition highlights the vibrancy of student accommodation as an investment class in university and college cities and towns across Scotland.

In October it acquired the 333 Bath Street development from Maven Capital Partners, a leading investor in student accommodation in Scotland, for £7.45m.

The block, which is adjacent to the King’s Theatre, was developed by Maven partner Calmont Property Group to provide 70 high specification studio apartments over six floors. The apartments offer access to extensive common space, including a residents’ club lounge, dinner party room, private gym, on-site cinema room, seminar rooms, a quiet reading room and games area.

Empiric’s purchase of the Bath Street site came after it snapped up the Ballet School development in the city’s west end for £12m in March. The property, which was formerly the home of Scottish Ballet, has 103 studio flats with wi-fi and underfloor heating throughout.

Empiric said at the time that it was attracted to the deal because it was also developing the former Willowbank Primary School, adjacent to the Ballet School. It is scheduled to open the 178-bed scheme, which would give it 281 bedrooms in the west end, in time for the start of the 2016 academic year.

Asked if Empiric would consider further investments in Glasgow, Mr Hadaway suggested that with his company’s portfolio accounting for less than one per cent of the total market, there is scope to expand its presence in the city.

“Our IPO strategy was 10,000 beds in five years. We talk about clustering so that we get three or four buildings close to each other, so management almost becomes as efficient as running a big block. The student experience is much more intimate and much more like a boutique hotel.

“At the moment, with two in the west end and two in the city, it maybe leaves a little bit of headroom if the right opportunity comes along.”

Mr Hadaway also highlighted the potential to invest in Aberdeen, where Empiric currently has a 56 bed scheme of student studio flats, and a 123 studio bed development in the offing. He observed that Robert Gordon University’s employment success for graduates makes it a popular location for students. “As a university city, we like Aberdeen a lot,” he said. “Both universities are fantastic.”

Empiric’s presence in Edinburgh is confined to 86-bed site currently under development in Buccleuch Street close to the university. He said site prices in the city have been “a bit warm” for the company, but signalled that it had opportunities under review.

Mr Hadaway said Empiric has also purchased a site, subject to planning permission, in the centre of Stirling, located next to a new-build residential development.

Noting that Glasgow, Edinburgh, Stirling and St Andrews are the company’s key targets in Scotland, he said he does not believe that “any of them have reached capacity” for student accommodation.