Breaking Property News 27/11/24
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Universities need to be aware of the changing student housing landscape if they want to be more profitable
Whilst Universities have been in the news lately regarding lack of funding, Owen Redman Co-founder of Roome had other things on his mind when we caught up with him. The big topic he wanted to talk about was, ‘With rising demand for affordable rooms and competition increasing in the PBSA sector, full occupancy will be harder to reach. So what does this mean for students and providers alike?’
Before we got into this, I asked Owen to explain what exactly the PBSA sector was, ‘The purpose-built student accommodation sector (PBSA) is as the name suggests where student housing is specifically built for university students by private new home developers. Typically the housing stock is either self-contained studio apartments or flats with private kitchens but shared living or breakout spaces. By 2028 as an asset class it will top £100 Bn and is set to rise further.’
Owen though is quick to point out that though there will be an increasing supply of new accommodation, actually getting the students to take up the accommodation is going to be a real problem. He feels that ‘With rising demand for affordable rooms and competition increasing in the PBSA sector, full occupancy will be harder to reach for some of the players in the space.’
He further adds that at Roome, they are addressing this by providing students with the information they need to make informed decisions. As he puts it, ‘When students can easily compare options, everyone benefits – and the best operators will stand out.’
Interestingly Owen (Pictured) also feels that whilst affordability is the number one factor as a consideration for where students live, the new generation of students were looking for other key elements in the place that will be home away from home for three years or more.
‘Whilst communications WiFi etc and security are on the list, mental wellbeing is fast becoming a big piece of the jigsaw puzzle when unpacking the psyche of students. The pressures of rising rents and rising utilities, food bills etc have an adverse effect on the student experience, developers and Universities providing PBSA need to build in nurturing systems to look after the welfare of the students – a win for all stakeholders.’
Clearly with Gen-A (Alpha) who are only four years away from being the new undergraduates flowing into the UK Universities it will be their needs and sensibilities that the PBSA sector will need to grapple with.
As Owen puts it, ‘A generation or so ago student accommodation was just purpose built flats, or even ex-local authority housing re-purposed. Now the occupants of University accommodation will have a digital native mindset, their parents will be Gen-X or even before that, and Gen-A are more inclusive, more used to solving problems and digitally exploring the world. Unlike previous generations they will demand more than just better laundrettes. Housing developers who deliver these nurturing centres will win big, with full occupancy rates.’
As outlined in a recent study carried out by Knight Frank in partnership with UCAS, ‘A significant 65% of first-time university applicants said the availability of suitable accommodation influenced their choice of institution, according to Knight Frank. This underscores the importance for developers and operators to ensure adequate, high-quality housing options appeal to the next generation of students.’
Owen also feels that there is also a great opportunity for Universities and students to win together, and it is this space that Roome excels as, ‘We not only act as a 360° consultancy for the Universities de-risking their operations, we are also fully listening to and interpreting the shifting needs of the students who take up courses and need to get the correct housing’.
‘Our watchwords are – Working with universities to improve student experience through seamless housing connections and insights! So being both a listening ear, and a sympathetic partner to both sides we help plot the best outcomes for the providers of accommodation and those who ultimately spend the ‘best years’ of their lives living away from home.’
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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