The Unite Group says it is forging ahead making money out of students.
In a trading update, the UK's largest provider of student accommodation, which has major operations in Birmingham, reported good progress in the year to date, in line with expectations.
It will operate 35,272 bedrooms in the 2006/07 academic year against 30,996 in 2005/06.
Reservations already stand at 78 per cent for 2006/07.
And Unite says there is growing interest in student accommodation as an investment class, offering substantial potential for income and capital growth.
It added: "The role of purpose-built, high-quality student accommodation in the physical and economic regeneration of the UK's university towns and cities is also being widely acknowledged."
Unite said its reservations performance represented the same proportion for the equivalent point last year, but when there were over 4,000 fewer beds in the portfolio.
It said it had "again been successful in letting an increasing proportion on tenancies of between 50 and 52 weeks, rather than the shorter academic year".
A total of 5,156 rooms have been let on 50 to 52 week tenancies compared to 4,095 in 2005/06.
It reported "further strong performance" for its Capital Cities joint venture with GIC Real Estate - 846 beds in five properties will be completed for the 2006/07 academic year, taking the total to 1,960.
And Unite's Student Village joint venture with Lehman Brothers will deliver its second village scheme comprising 964 beds in Leeds city centre for occupation this summer.
It stated: "The group continues to benefit from positive market fundamentals. Although UCAS figures for 2006/07 applications reflect a marginal decline of -3.2 per cent year on year, that follows the exceptional increase in applications in 2005/06, with average annual growth over the past two years of 2.6 per cent.
"Unite continues to make strong progress across its business. Student accommod ation is increasingly recognised as an attractive commercial property sector and the experience of the group and its market leading presence should ensure that shareholders benefit from these positive trends."
The company said it had given detailed consideration to the proposed UK Real Estate Investment Trust structure to be introduced in 2007 but had concluded that it was "unlikely to convert to REIT status in the short term, given our continuing levels of development activity".
There were "more appropriate options available", it maintained, and went on: "In that respect, the group is evaluating the potential formation of a student accommodation fund which would acquire substantially all of the completed and stabilised direct let properties. The group would retain a significant minority stake in any such fund and would act as manager of the properties as well as of the fund itself. Such a transaction would release capital to repay debt and for reinvestment in ongoing development to support future growth."
Mark Allan, chief financial officer, said: "The group is well placed to continue to drive investment into the sector. Development progress is on track and acquisition activity for 2007 and 2008 bed deliveries continues in line with plan."
Last month Unite and Cala Homes (Midlands) unveiled plans for a £30 million student accommodation and family housing scheme in Selly Oak, Birmingham.
A detailed planning application has gone to Birmingham City Council to build 331 units for students and 88 new family homes at Elliott Road.
The 1.85 hectare brownfield site already has outline planning permission.
Unite and Cala say the proposals will help overcome a shortage of quality student accommodation and family housing in the area.
Unite currently provides accommodation for 1,182 students in Birmingham at The Heights in Staniforth Street and Londonderry House, Newton Street.
The site of the proposed new development, which used to be the Selly Oak Bus Depot along with light industrial units, lies between Elliott Road, the Birmingham and Worcester Canal, Selly Oak Hospital staff car park and existing factories.
Tim Mitchell, managing director for Unite's Southern development region, said Birmingham continued to see considerable growth in student numbers within the city.
Unite has already invested more than £50 million in the city and plans to invest the same in the next two years.