Aaron Maskrey, GSA’s Head of Research and Intelligence, discusses the importance of understanding universities’ strategic plans.UTU
As the clouds of Brexit loom overhead, there is a lot of uncertainty in the market. Amongst all of this however, two clear trends are also apparent; students continue to become more mobile (domestically and internationally), and despite the increase in supply over the past four years (mainly from private providers), there is still a supply/demand imbalance in the UK’s student accommodation sector.
Despite the uncertainty, investors can take comfort from the demand for UK university places, which is expected to continue regardless of Britain’s departure from the EU and the potential for a new immigration policy. Since Brexit was announced Britain’s universities’ HEI reputation has improved as the country took 1st place for the first time ever. While enrolments from EU citizens have declined in the short term, the shortfall is expected to be filled by a 2.8% rise in international student applications. A Chinese student will not care if the UK is in the EU or not. They are coming for a high-quality education and English-based curriculum, but what is key is that HEI’s branch out further in their marketing strategies, reaching those beyond the domestic and European markets.
If PBSA providers are to make the correct investments, it’s vital that they understand universities’ strategic plans and growth targets. These paint a picture of how proactive institutions are towards growth, and whether their focus is on academia and research, faculty / facility expansion or internationalisation etc. All of these factors impact how likely the university is to attract a greater proportion of international students and how well-prepared institutions are to do this will directly impact how willing PBSA providers are to invest in developing a city’s accommodation. One of the key indicators for investors is the QS and THE rankings, which clearly indicate how strong a HEI’s international marketing programme is, as one of the easiest ways for an institution to climb up the rankings is to become more ‘international’ at least in terms of their marketing and customer base.
What we do know is that the ambiguity around Brexit will not be solved overnight, but by working closely with universities and taking the right precautions to make savvy investments, the student accommodation sector as a whole is a healthy one which continues to offer generous rewards for investors.
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