A US property investment firm is making a multi-million pound move into the Scottish student accommodation market with developments in Glasgow and Edinburgh.

The move by CA Ventures reflects confidence in the potential of the market in the Scottish cities amid growth in the university sector in recent years.

The firm is developing a 422 bedroom facility on Cathedral Street in central Glasgow and one with 216 bedrooms on Dundee Street in the Fountainbridge area of Edinburgh.

Read more: Bet on student housing in Scotland pays for private equity firm

Both are on sites chosen to allow the schemes to appeal to students from a range of universities.

The developments form part of a three city programme, which will include a 250-bed development in Sheffield. The programme will be completed with £64 million loan funding from Investec, the South African banking and asset management group.

There have been concerns that growth in supply of student accommodation may have run ahead of demand in cities such as Cardiff.

Shivani Goolab, at Investec Structured Property Finance, noted: “There remain significant pockets of the UK where there is a chronic undersupply of student beds.” Investec said Edinburgh is one of the UK’s most undersupplied university locations, with a student to bed ratio of 3:1. The imbalance is forecast to increase.

Read more: 'Most sought after' apartment in Edinburgh hits rental market with price tag to match

Chicago-based CA Ventures said it expected to draw on a near 15 year track record of developing and operating student accommodation portfolios in the USA in establishing its footprint in the UK.

The three UK schemes are expected to be completed in time for the 2020/21 academic year.

Investec underlined the appeal of the purpose built student accommodation (PBSA) sector in the UK for investors.

Favourable economic factors include a weak pound and low interest rates. “At the same time, the long-term, visible income streams and covenant strength offered are extremely appealing to institutional investors,” said Ms Goolab.

Investec has provided more than £650m total funding for 41 PBSA schemes in the UK, including nine in Scotland.

Meanwhile a £1.7 million apartment billed as ‘Edinburgh’s most sought-after’ is to be made available for rental at a cost of £5,000 plus a month.

The three-bedroom penthouse apartment forms part of the Crescent Development on the site of the landmark former Donaldson’s College. Tay Letting has been appointed to market the apartment.