Vita Student CEO Trevor Moore discusses the need for more PBSA investment:
“Student property investment is no longer an alternative asset class. It is not even a mainstream investment staple. Put simply, student property investment is a necessity.”
Figures released last week show purpose-built student accommodation – or PBSA as it’s known – continues to attract investors. Following three years in which an annual £2 billion investment ploughed into the sector, Q1 2015 is set for a record £3.3 billion spend. This phenomenal surge is extraordinary, coming as it does prior to an election – traditionally a subdued investment period – and highlights the level of confidence in the PBSA sector.
I’ll write on a future occasion about the wider holistic benefits of PBSA as opposed to HMOs, but I want to stress that an investment in PBSA is equally as beneficial to the student, university, local community and national economy as it is to the investor.
That is why more investment must and will come.
A credible but critical investment
I say this not because PBSA investment is the UK’s top performing asset class, now attracting global and institutional attention, nor because uncertain economic results from across the Atlantic are pushing investors towards non-cyclical assets. I say this simply because PBSA provides a much-needed service – and the UK’s flagship higher education industry commands more of it.
This country’s students are the beating heart of our economic future, tasked with providing the lifeblood of future British workforces. They are currently hampered by a housing network, the vast majority of which is utterly unfit.
Undersupply is not a licence for negligence
The huge demand for British university places has led to many students renting such poor houses that non-student tenants would flat-out refuse to live in them. One in five students have lived in a house with vermin problems. The weight of demand allows many rogue landlords to get away with utter negligence.
A sea change of student accommodation
I firmly believe that £9 billion worth of investment is just the start of the solution to the problem. A customer doesn’t care how much you know until they know how much you care – and the UK needs to show it cares about students’ overall university experience.
If students cannot enjoy a satisfying and inspiring three years in a city, they will go elsewhere and an increasingly mobile market will go overseas.
At Vita Student we go out of our way to show how much we care and how much we want students to enjoy living with us. And it’s not about the functional stuff, such as fixtures and fittings, megabits and movie rooms. We took a wide-ranging experience-led approach, which addressed all the limitations we found with existing student accommodation.
It’s an evolving process, but we now have a student accommodation product that is not a higher education afterthought. It’s an active consideration in students’ choice of university city. It’s something to be proud of.
Both parents and students have told me they chose to study at a certain institution because Vita Student was located nearby. No-one has ever said a HMO – as nice as it may be – has been a defining factor in their choice of university city and further investment will only continue to ensure that UK student accommodation is a valuable asset for all higher education stakeholders.