Investment in the student housing market soared to a record £2.7bn in 2012, despite a drop in student numbers.

Turnover was up from circa £1bn in 2011 and was almost eight times higher than sales in 2009, CBRE has calculated.

The rise in the sector comes despite university application numbers falling. According to Ucas, as at November 2012, the number of UK-born students who had applied to start university this year was down by 8.4% on the same month in 2011. The decline is a result of the introduction in autumn last year of fees of up to £9,000 a year.

Jo Winchester, head of student advisory at CBRE, said: "Our latest 2012 data shows that student housing is outperforming other asset classes by some margin, as it has delivered 9.6% total returns in 2012. This compares to 4.4% for all offices and 2.2% for all retail over the same period."

Key deals last year included Dutch pension fund PGGM purchasing a 60% stake in £1.4bn UPP, one of the UK's largest university campus developers.