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Bricks and mortar: the student property sector

Investment in student property has soared in recent years, and as providers focus on capacity, what new trends could improve experience?

Posted by Julian Owen | December 13, 2017 | Estates

Everyone, it seems, has invested in student accommodation. Students have bought into it, emotionally and financially. Demand from private investors is still growing fast, according to Savills, who expect an increase to 75,000 beds trading for £5.3bn this year, a rise of 17% since 2016. Universities are expanding their capacity, but do current trends in university living indicate that students want more?

The private sector plays an important role in a competitive higher education market, Richard Gabelich, CEO of Campus Living Villages says, as universities are now having to find progressive ways to attract students. “Universities need to look at the whole offering. There are big funding pressures... the demand is going up but funding levels have been pretty static, and that’s where we can help.”

Sarah Jones, Director of Research and Development at Empiric Student Living, says: “There really are winners and losers after the rise of tuition fees. Great institutions are outgrowing their housing market and accommodation on campus. What universities need to aspire is to ensure that the guarantee for first years remains in place. They can’t do it on their own… planning constraints mean that we can’t live in the same way. Returning students want to live in purpose-built student accommodation, instead of houses of multiple occupancy.” All roads lead to greater provision and this additional capacity in the market allows people to fulfil their chosen lifestyle. “Choice runs through everything. The rise of the private sector in student accommodation has been really beneficial for people studying at every level.” 

Jenny Shaw, Head of Student Services and Insight at Unite, thinks accommodation is key to experience: “That social experience that many students have in their accommodation does seem to impact on retention, how happy they feel, even how happy they are with their course.” 

Empiric's Willowbank accommodation is in a prime position in the West End of Glasgow

Community and security

Policy trends in the 1990s focused on bed spaces, rather than student experience, according to Jenny, and this is now changing. The latest Unite survey, Everyone In, found inclusivity is an issue in accommodation and on campus. Jenny has seen the trend towards diversity increase within the wider student body, but some groups need support to ensure they feel included. Unite’s survey finds that among marginalised groups such as LGBT+ students, and those with mental health issues, satisfaction drops dramatically.

What Unite has done is drill down to what students need to succeed. “They need to feel like they belong, integrated in their accommodation, as well as more widely the university, and to be a part of something. It makes a big difference on retention. We know that mental health issues have gone up, there’s such a lot riding on it, such a big investment people are making,” Jenny says. 

Students have the usual academic stress too, and social media plays a part, so according to Jenny, universities need to provide, “A joined-up approach, not necessarily shiny new buildings, which are nice to have, but it is an experience, a service, it is that reassurance to students that they will be able to find the help that’s needed as well.” University is a great learning opportunity to meet people different from yourself, but, she adds, students have to know that: “You are ‘allowed to be there’, particularly for those in minorities or LGBT+. There’s a basic safety issue before you can learn from other cultures.”

For Richard, safety is key: “Lots of what CLV do is leasehold, on campus, or very near to it. A key driver for us is we are seen as safe, secure and professionally run.” 

Sarah asserts that choice and students’ discerning natures, will drive them to opt out if the system if doesn’t work. “Of course, the usual drivers of location and price are huge but community, experience and lifestyle are all part of that as well.” Sarah continues: “There’s a huge amount of fear for a first year, fear that they won’t fit in, that they won’t find a community. If we have buildings and service provision which engender community, to make sure those people are safe, but they are also having the experience they want.”

University-run halls, and private providers recruit student reps to welcome new arrivals, and host events, but design plays a part too. There should be, Jenny explains, “An approach to accommodation that encourages all students to form a community, to meet people they can get on with, little nudges like how things are designed, so students get out of their rooms and move through spaces so there are opportunities to interact.”

CLV Salford's Peel Park Quarter

The co-living is easy

The experts are naturally cautious about predicting economic trends. Since Brexit, the devaluation of the pound has helped the UK retain its competitiveness, so far, with regard to international students. Overall, Jenny says demand from students has held up surprisingly well since the introduction of higher fees. Students still buy into the experience of studying away from home.

There’s more confidence about predicting technology trends and consequent impact on flexibility and affordability. Richard says, “Education is developing around small group learning, and may not need the big lecture theatre, so do students need to actually stay there?” Students may need flexible accommodation instead, such as short-stay programmes, month-to-month tenancies or hotel-style rooms. Design is changing, Richard says: “Physical things in terms of mixed use space... a living learning community; we’re integrating parts of university into our buildings.” 

Desks might disappear as students are studying on their bed with a laptop, instead of poring over textbooks. If bedrooms get smaller this may allow larger communal areas without a price hike. It’s part of a new trend in society towards co-living, which universities are catching up with. Students have a significant challenge to face in making the most of smaller personal spaces; to this end Ready to Store have published this practical guide to student storage.

It can take a long time for some universities to change, according to Sarah, and Empiric’s flats have specific-use spaces like gyms and cinemas, but she remarks: “Flexible spaces are something that people [also] are really interested in. If there is a big common room, they can study, play, they can do things at the same time.” Like its occupants, the building has to multitask. 

Tech and expectations will change as Gen Z arrives. Jenny observes: “It really feels quite different, the way they organise themselves... looking ahead, people will still want to talk to people, but everything that can be automated, should be.” This generation is Wi-Fi hungry, and does everything online. Students in Unite accommodation can manage laundry, and report maintenance issues through apps. “Unite are trying to make it really simple, really intuitive. Our [first year] students can talk to other students in their flat before they arrive, a moderated platform, which takes away the fear of talking to strangers.” 

Student accommodation then, is more than bed spaces. Digital advances in higher education could result in better value and a more cohesive community for all students. Universities could harness these tech trends to create more communal co-living for a better student experience. 

Case Study

Lancaster Grizedale College cluster flats

Lancaster University has 6,500 campus bed spaces, with plans for 2,000 more over the next 10 years. Candace Davies, Lancaster’s Head of Accommodation, says: “The colleges form small communities. Students are looking for a home, rather than a just a room, they want social space.”

Two thirds of Lancaster’s rooms are owned by UPP. Candace says it’s a hugely beneficial relationship, as UPP provided ideas and professionalism from the outset. “We want to remain award winning, at the forefront of choice. Students are pushing for decent accommodation at the right price. The studio phase has been and gone.

“Future trends we’re picking up at Lancaster are wellbeing, tech, flexible spaces and the importance of value for money. There is definitely more need to think about providing accommodation that aims to maintain or improve health and wellbeing, giving consideration to things like natural light as well as controllable light and heating. I think this then also steps into the arena of sustainability which students also have greater awareness of now.” 

The award-winning Grizedale townhouses which sleep 12 has proved popular. It’s good value as two bedrooms share a bathroom and there are rooms per floor. “The townhouse is all about the social space on the ground floor, a large flexible space, where they can study, they can group study, where they can eat, cook and socialise together.”

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