The business of Student Accommodation

The growth in student accommodation over the past 20 years has been staggering. As a sector, it’s gone from almost non-existent with universities only aiming to offer rooms to a small proportion of first-year students, to it becoming a huge new sector drawing in worldwide investment, that serves students across the UK, independently of the Universities. Whole city blocks have been built to serve this market alone, freeing former student houses in residential areas back up for families.

As a business, we have completed over 12,000 student rooms over the last ten years or so and are now working on a number of Build-to-Rent (or BTR) properties, that follow a similar build pattern.

Depending on which report you read, there are now approximately 1.7m students in full-time education. Of these, around 1 million live away from home, with around 23% of these coming from overseas. Breaking this down further, the overseas students are made up of 14% undergraduate and 38% postgraduate with approximately 21% of them originating from China. Covid may have changed this in the short term, but there’s no belief it’s a long term shift away from UK universities.

Student accommodation by Kimpton

To serve this one million-plus students looking for accommodation, there are around 600,000 rooms within the Purpose Built Student Accommodation (PBSA) sector and this is growing every year. The rest of the demand is served by private and independent landlords. Standards here can still be extraordinarily variable.

But there are some real changes afoot. There’s a rising demand for lower-priced units. The NUS have set a target of 25% of beds being available at c£4,200 per annum and only 19% currently meets this criteria. There’s also a slight move away from studio-based accommodation, which looked so popular a few years ago and a concurrent rise in demand for more larger cluster-based units, with simple en-suite bathrooms and shared kitchen facilities.

At the same time, there has been a change in the demographic of students, with fewer 18 year olds in the UK than in recent years, there are fewer people in the market. A Covid student experience was hardly what was promised and many will be glad they delayed until a more normal student experience returns, if it ever does. It’s highly likely that the design of the student units will change again to make remote attendance at lectures from your accommodation more comfortable.

Air Conditioning by Kimptons

This all means that the students of tomorrow can be more demanding in both their choice of education facility and where they want to live. It’s one of the reasons for the enormous rise in unconditional offers over recent years to try and tie students in early who they are sure will do well and last the course.

Real choice has come into the market and the option is there to vote with your feet. The students and often their parents who are paying – are demanding higher quality spaces, but rather less inclined to pay a hefty premium for it.

So if higher quality and lower prices are being demanded, something has to give.

Where can savings be made that will allow the universities and the private sector branded providers to deliver higher quality at lower cost?

Whilst the lower-priced demand will probably be filled with the older, less fashionable units, the new builds coming to market will have to consider the energy provision for the complex as a way to meet this need.

Renewable Technology has advanced so much of late, that a plant room built over five years ago could potentially be completely replaced from the savings it could deliver over the next five years when compared to the existing plant provision.

Even CHP (Combined Heat and Power) units are less popular than two years ago, with much of the hot water demand now being served by an array of Air Sourced Heat Pumps (ASHP) and heating delivered with electric panel heaters. This solution can take the strain for all of the building’s domestic hot water base load and be supported by other lower-cost options to deliver savings and potential efficiencies for years to come. These units never have baths installed, favouring showers instead, so the water usage is surprisingly low.

There’s been a fundamental shift towards renewables, with ASHP being just one of the options available. As a business, we predicted this change many years ago and were very early adopters in the renewable sector. We have a deep knowledge of what delivers long term cost-effective, lower-carbon energy.

Decarbonisation of the heating and hot water supply in both the PBSA and BTR sectors is likely to be driven by legislation, but low ongoing running costs and high levels of occupancy will continue to be the key drivers for the building operators.

At Kimpton we live and breathe all aspects of Student Accommodation, Build to Rent, renewable plant room refurbishment and understand what is required for the long term effective maintenance of your student accommodation plant and mechanical services.

Dover court student accommodation by Kimpton

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    Creating the
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