The Future of PBSA
INVESTMENTS IN A CHANGING EUROPEAN LANDSCAPE
EU & UK PBSA INVESTMENT
ETPS IN EUROPE
HIGHER EDUCATION ENROLMENT GROWTH
- 5 years growth
- 1 year growth
Quantity and quality
For a number of years sovereign wealth funds (SWFs) and institutional investors have been front and centre in the drive and development of purpose built student accommodation (PBSA) across the UK and EU. As Javier Capape (2018) noted, SWFs have quadrupled their investment in PBSA over five years (2012-2017). The UK remains by far the largest market for PBSA in Europe. While not as mature, PBSA stories across continental Europe are just as diverse and nuanced. A number of key factors continuing to influence PBSA across the UK and EU include: changing demographics, political restlessness, GenY and Z housing preferences. Recently, strong demand for English taught programmes (ETPs) in the EU means growing demand in contexts light on PBSA across history. Growth in ETPs and liberal policies aimed at attracting and retaining domestic and international students will underpin near term demand for PBSA. Likewise, the influence of varying tuition/fee levels on demand for UK and EU HE (and PBSA) remains in debate.
Demand for places in UK higher education institutions (HEIs) is shifting. In their last report, UCAS noted that demand for UK HE places by prospective students from the UK and
EU remained stable. Additionally, non-EU applications for UK HE were trending upwards. However, acceptance rates for non-EU student applicants declined (UCAS 2019). Similarly, EUROSTAT (2019) noted a steady upward trend in demand for HE and student numbers across the continent (e.g. France, Germany, Netherlands). What does this mean for UK and EU PBSA? Will investors in UK PBSA respond to these changes by diversifying the types of PBSA on offer? Will student demand for private and HEI provided PBSA continue to drive innovation in typologies and amenities in PBSA? With Brexit and emerging EU markets (e.g. Italy, Portugal, Poland), PBSA continues in a dynamic state, awaiting courageous responses from suppliers, students, providers and institutions alike.
Sovereign wealth funds have quadrupled their investment in student housing in a bet on the growth of wealthier middle classes in emerging economies who want to send their children to study abroad
— Javier Espinoza, FT 2018
Value for money
Sensitivity to student debt is growing. Demand for PBSA continues to outpace supply across the UK and Europe. While ‘more’ is needed, a strong investment in diverse types of PBSA delivering quality in amenities and space is a key concern. Diverse tuition and fee levels is shifting the demand for HE across the UK and Europe more broadly with total cost of attendance (COA) becoming an acute issue. Students are leaving university with ever growing levels of debt. As such, the proposition of PBSA as ‘value’ for money is evolving around whether, and how, PBSA can be ‘re’-coupled with other institutional activities (e.g. academics, research, extracurricular activities) students engage in during their participation in HE. Might the current conditions lead to a renaissance for PBSA and HE alike? Concern for affordability and accessibility is crucial to sustaining PBSA across the UK and EU.
Investing in turbulent times
Brexit is weighing heavily on the current debate about whether, and how, to invest in PBSA across the UK and continental Europe. Across history, fortune has favoured the brave and bold. A number of views have been proffered on if, and how, Brexit will influence investment in UK and EU PBSA. PBSA in the UK has been sustained by the coupling of student residential accommodation. Now, private provided and public private partnerships are underpinning growth in recent PBSA development in the UK. HEIs, faced with challenging macro level funding conditions, are growing ever reliant on outside investment for their estates and related activities, including student accommodation. As the funding models and regimes have changed so too have university approaches to managing their estates, including, student residential accommodation.
Typical annual cost of study (BA PUBLIC)
Sources: universitiesuk.ac.uk; timeshighereducation.com; research-in-germany.org; crue.org; topuniversities.com
NO. OF UNIVERSITY
- EU Student
- Non-EU Student
- EU Student