The future of Student Living investment and development.

I attended a property and investment conference yesterday at the Congress Centre in central London. The title/ focus of the conference was ‘The globalisation of Student Housing and the Future Investment market‘. As usual it was a well attended event – probably 350+, with senior representatives from UPP, Liberty Living, The Mansion Group, Campus Living Villages, Bouygues, Opal Group, Knightsbridge, Watkins Jones…to name just some! The student living property market has remained buoyant through the recession and investment/ development has continued, albeit at a much lesser level than at its peak in 2006. As well as continued development of new buildings in 2012, the property transaction market is active and large deals continue across London and the regions as new entrants seek attractive investment returns on assets and existing players restructure their property port-folios/ funding/ debt facilities.

Funding remains an obstacle in the sector, the banks are obviously risk adverse, but perhaps need to change their thinking about only backing the ‘The Times Top 20‘ – these are high profile institutes with a strong supply of purpose built housing! Are these really the best locations/ schemes to fund? The need in the market is the top 20-50+ ranked universities. Robust schemes in the right location, with the right design and realistic cost models can be achieved – and should be funded. Clearly there is much more I could say about funding, but that’s not my focus. What I would say is that both private and university deals are happening in the sector. We are involved in a number of significant transactions at present – one of which is in excess of £100m. We have also just secured a project with the University of Liverpool for circa £50m. There are many more we are working on at various stages and our experience extends to every one of our UK offices now.

Interestingly the view on the impact of student fee increases is pretty consistent from all quarters (universities, developers, operators, agents, investors, funding organisations); it wont have a significant or detrimental impact on the continued need for Student Housing.

‘Student Experience’ is a hot topic this year – the bar is being raised in the quality of accommodation from both the building fabric externally and internally, but also in how facilities are managed/ operated. Universities need to align their housing offer with the academic offer – and with higher fees comes increased expectation of quality throughout university life. New design ideas continue to emerge and this has been a big focus for us in demonstrating to clients that we continue to lead the sector in design. We have delivered in excess of 10,000 bedrooms in the last 6-8 years and we have at least 5000+ beds in design development at present.

A big theme of yesterday’s conference was on future ‘globalisation’ of student living – the UK is No. 1 globally, in terms of volume, in property and investment of purpose built student living – both on and off campus. UK universities are expanding and investing globally now, for lots of reasons. With that comes increasing opportunities to take our successful UK experience in student living to European countries, Australia, America, China, India and many others. Jones Lang LaSalle have recently published a feature on this which can be see here.

Yesterday’s conference has once again been hugely positive and useful for me and our business – we are an established and recognised architecture firm in the sector with a huge diversity of experience now. We have some excellent long-term clients in the sector, with whom we are proud to be associated with. I now have a number of meetings to progress in the coming weeks, with potential new clients, to continue to fly our flag and tell people how we can genuinely ‘add value’ to development projects through our experience and way of working.

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3 thoughts on “The future of Student Living investment and development.”

  1. I read this synopsis with interest having acted on number of student accommodation deals in the last 2 years. It is great to see one sector remaining strong in such tough times. Let’s hope the funding can be found to allow more developments to go ahead and kick start growth again.

  2. A good summary, Nick.
    We are increasingly active in the international markets beyond the UK.
    Hope to catch up soon!
    Rupert Wyard
    Director
    Campus Development Management Ltd

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