博鱼体育集团

This week, 博鱼体育集团 Frank鈥檚 Student Property and Research teams held a webinar on what Covid-19 means for the UK student property market.

Matt Bowen, Global Head of Student Property Research, was joined by Neil Armstrong and Merelina Sykes, Joint-Heads of Student Property at 博鱼体育集团 Frank, and guest speakers from the industry Nick Hayes, Group Property Director at Unite Students, Sean McKeown, Managing Director at Arlington Advisors, Sarah Barr Miller, Head of Insight at UCAS, Nick Barker, Director at GCP Student, Anthony Mellalieu, Development Director at Urbanest and Mark Bladon of Investec.

Over 650 attendees from 20 different countries joined the call, itself a good barometer of the strength and interest in the sector.

The panel discussed the impact of Covid-19 on the student market covering; international student numbers, university opening plans, new and existing PBSA development, and more. Some comments have been summarised below, but the full recording can be accessed here:

The sector has undoubtedly been left in a state of flux as a result of the Covid-19 pandemic, with potential disruption to the summer term and next academic cycle likely to have an impact on the operation side of the purpose-built student accommodation (PBSA) market.

鈥淭he booking cycle for UK universities, and also certainly for our buildings, will be a more drawn out process," Nick Barker noted. "One of the themes that we鈥檙e likely to see is a delay in decision making from students this academic year. The clearing cycle will be longer this year and this will mean students, particularly domestic students can choose to sit on their hands a bit and make their decisions later in the cycle."

鈥淭he other factor is waiting to see how the universities react," Sean McKeown added. "The University of Manchester has said that term will start in September, but that lectures and other aspects of learning will be done online, but that doesn鈥檛 necessarily reflect what all universities are going to do, so we鈥檙e left waiting for that guidance.鈥�

This is likely to be further complicated by the fact that not all universities are expected to adopt the same approach.

鈥淭here鈥檚 not going to be a mandate for all universities to come out with the same plan so I think it鈥檚 going to be interesting to see what different universities do and whether that鈥檚 almost a marketing tactic in its own right. What we can see when we survey students is that online learning is not a popular option. The most popular option is to start in September, even if social distancing is in place, so we鈥檙e hoping that more universities will provide this clarity,鈥� Sarah Barr Miller said.

Student numbers

Of course, one of the big question marks relates to whether international students, who typically make up a high proportion of those living in PBSA, will arrive. Universities face an anxious wait to understand the impact travel restrictions may have, as well as the competition they may face for a finite and reduced number of UK students.

鈥淥ne key feature of this cycle is that all applicants, regardless of where they live, are not yet making definitive plans. Some 54,000 have yet to make a decision on their university of choice, compared to 34,000 at this point last year,鈥� Sarah Barr Miller said, drawing on extensive data from UCAS.

We will be exploring research from UCAS into this topic in more detail in a separate blog next week.

Resilience of sector

As we have noted previously, despite these concerns, there are positives to draw on from the long-term resilience of UK Higher Education and the accommodation that supports it.

鈥淭he fundamentals of why we like student still there. The number of 18-year olds coming through over the next few years is going to be rising," said Nick Barker. "When terms start again, students will still want to live close to universities... from an income perspective we鈥檙e being hit quite hard at present, but that will return and when it does I think the bounceback will be quite strong.鈥�

鈥淚nstitutional investors are still going to need to have an element of exposure to real estate to balance their portfolios and I think what we鈥檙e going to see over the next few months and years is winners and losers emerging and in my mind the business that will do well are those business in sectors that have strong fundamentals and I believe that the UK student sector falls in that category,鈥� Nick Hayes added.

鈥淥ur investor is a long-term investor and certainly they see this as a short-term blip, so we see this as a major opportunity following 2009 the student housing sector prospered in terms of land acquisition and taking developments forward, so I think we鈥檙e foreseeing a replica of that, or we certainly think that could be the case,鈥� Anthony Mellalieu said.