Developers learn to accommodate a growing number of students

Although new starts in the education sector have come under pressure recently, the outlook for investment in higher education – particularly new student accommodation – remains positive. As universities compete to attract students, they have continued to invest in new facilities and Glenigan data shows that university project starts were worth £1.5 billion in 2016, up 14% on the previous year. The Russell Group of elite universities alone had a development pipeline worth £9 billion in 2014. Although Brexit has cast some doubt over future student numbers as well as access to EU research funds - which may have contributed to a 23% fall in planning approvals last year - the momentum in the sector remains positive. Indeed, a number of universities are set to make major investments in new campuses. The University of Bristol is planning a new campus which will house its new library and digital innovation and student resource hubs. Last year, the University of West Scotland secured planning permission for a new campus on the edge of Hamilton involving academic and office buildings, together with student accommodation and sports facilities. Major projects are also planned at Kingston University, where a new £50 million building is proposed and Glasgow University is planning a £1 billion investment over the next ten years, extending its footprint by 25%. Medium and long term expansion across the sector bodes well for the number of student accommodation units required. A recent report on student accommodation by agents Cushman & Wakefield said investment in the sector reached £3.1 billion in 2016 with the number of purpose-built beds rising by 29,000 (21,400 from the private sector) to 568,000 in 2016/17 and rents increasing by 2.7%. Despite the heavy development of new accommodation, the report says that with a record 1.7 million students studying in the UK, the national student to bed ratio – a measure of demand in the sector – has actually increased from 2.1 to 2.3 students per bed space. In some areas, investors have become wary of the pace of expansion, particularly in the number of new studios. Both Glasgow and Newcastle have pipelines of over 6,000 units. Today, new private development in London has become more difficult – partly due to the community infrastructure levy – but the report suggests the capital still faces a structural undersupply with 20-30,000 new bed spaces needed by 2025. Glenigan data highlights various major projects around the country which reflect the strong demand for student accommodation. Detailed plans have been submitted for the £150 million masterplan for new student accommodation and building at the University of Brighton, which is at the pre-tender stage with work set to start this December. Elsewhere, work started earlier in the Spring on the University of Gloucester’s £57 million Pittville Campus student village in Cheltenham, which will involve over 600 new student bedrooms.