Unite Group said it was looking beyond the capital for new development projects as land costs and rival schemes were impacting on returns.

Mark Allan, Chief Executive of The Unite Group, said: “The demand outlook for student accommodation is robust and there are clear signs of enhanced investor appetite in the sector which should underpin investment yields.

“The outlook for development activity remains compelling and, although the London development market place is increasingly competitive, we are starting to see a small number of specific regional locations offering appealing opportunities on a highly selective basis.”

The firm, which is presently on site on projects at Stratford and Camden in London, confirmed it had bought a 378-bed development in Huddersfield, with planning permission, where it said it expected to deliver 10% yield on rental because of lower development costs.

Unite also confirmed its £25m plan to build 500 rooms at the site of an old ice rink in Trenchard Street, Bristol will start on site later this year.

It also added it would shortly secure a development site for a major 950 bed scheme.

“Similar opportunities are emerging in a select number of other regional locations with strong market fundamentals and we will continue to examine these on a highly selective basis,” said Allan.