The future of PBSA
Kevin Williamson, investment director, Host, speculates on the future of the PBSA market
There continues to be a trend of designing for communities within purpose-built student properties, where the importance of well laid-out communal facilities rivals Wi-Fi speed.
We have seen cinemas, gyms, yoga rooms and karaoke rooms in new developments, but it’s not just the facilities but also the open communal space that is provided, which can then be used in a variety of ways. Looking to the future, we are likely to see an increased range of different facilities being offered in communal areas, which will continue to push the boundaries of the PBSA proposition.
We continue to see significant interest in the student asset class from both UK and overseas investors, all of which are comfortable now with the direct let model and there remains a healthy appetite to forward fund well-located and well-designed student accommodation in buildings in strong markets.
We might start to see a lot more opportunities to combine direct let with university agreements, as obtaining planning in certain areas requires support from the respective university.
As universities continue to grow, they are looking increasingly to the private sector to provide accommodation for their students. They know that a good accommodation offer helps in their own recruitment of students and, in some cases, can influence design and layouts of new developments, if there is the prospect of a contractual relationship.
As ever, ensuring buildings are sustainable is a challenge, particularly for existing buildings. In new builds, considerations concerning more efficient methods and new technology have to be balanced with the constant operation and occupancy of this type of property.