I already have exposure to UK real estate through the shares I own in Tritax Big Box REIT. I’m expecting demand for its warehouse and logistics buildings to soar as e-commerce clicks through the gears. I’m convinced that the student accommodation property sector could also help me make a stack of cash. It’s why I think Empiric Student Property (LSE: ESP) could be one of the best penny stocks to buy for my portfolio.
A report by the National Union of Students illustrates why the likes of Empiric might be a brilliant purchase for me. A shortage of new beds means that the average rent for purpose-build student accommodation has rocketed 61% over the past decade. An average cost of £7,374 per year in 2021/22 is also up 16% from pre-pandemic levels.
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Latest data on student enrolments suggests that accommodation will remain scarce, too, thus keeping rents moving northwards. University clearing service UCAS has earlier said total applications in this academic period are up more than 8% year-on-year.
Profits at Empiric and its peers could suffer if applicants from the EU continue to fall post-Brexit. But all things considered I think the accommodation provider is an excellent penny stock for me to buy.
A golden era?
I think Greatland Gold (LSE: GGP) is another top penny stock for me to buy. Precious metals prices remain in a broad holding pattern but I believe an environment of high inflation could send them spiralling higher. Forecasters at Société Générale think gold will trade at around $1,900 per ounce by the second quarter of 2022. That’s up around 130 bucks from current levels.
With key inflation readings recently surpassing analysts’ expectations, though, I think there’s a good chance gold could perform better than some think. The rate of price rises are already pretty hair raising: consumer price inflation in the US hit 6.8% in November. That’s the highest reading for 40 years.
Another top penny stock I’d buy
I wouldn’t just buy Greatland Gold because of the bright near-term outlook for gold values, though. I’m also encouraged by recent news from the miner concerning exploration work at its Haveiron gold-copper project. Fresh drilling work at the mine in Western Australia revealed “significant” mineralisation in 19 of the 24 drilled holes. A $16m share placing last month gives the penny stock plenty of financial clout to develop the mine as well.
I’m aware that any setbacks with bringing Haveiron online would have a significant impact on Greatland Gold’s revenues. It could also have massive implications on overall costs. Considering that the business isn’t expected to turn a profit this financial year (to June 2022) this could prove particularly spooky for investors and prompt a sharp share price reversal.
Still, it’s my opinion that the potential rewards at Greatland Gold outweigh these risks. The bright outlook for gold prices and the quality of its Australian assets makes the miner a worthy buy in my opinion. Just like Empiric Student Property, I’d happily buy the company today for 2022.