One thing the world could not have fathomed during the start of 2020 was a global pandemic and the extent of the impact it would have on the economy, and in general, life as we know it. Beyond the blows to businesses across the world, there was a fall in the number of bookings and occupancy levels when it came to the global student housing sector.
Having said that the student housing sector has performed stronger than expected, having made it through the crisis with positive reports of robust booking and occupancy rates. It’s been more than 8 years since I became a part of the student housing sector, and I must admit I’m proud of the way stakeholders including providers, universities, and students have responded to the global pandemic.
From my interaction with various students, the single most important factor influencing their choice of accommodation is value for money. Over the past few months, I’ve noticed a shift towards safety, with a majority of students choosing an accommodation that implemented strict safety and hygiene protocols. The shift towards quality of offering also highlights the fact that perceived value for money is not driven entirely by cost.
And we at University Living have been mindful of these changes in preferences, we want students to feel as safe as they would at home. With the introduction of our recent services, we are continuously helping students make their study abroad experience safe and memorable. On that note, I would like to discuss in detail the trends that will influence student housing in the year 2021.
Student’s growing trust in PBSA — A Silver Lining
A survey conducted by Knight Frank confirms that 69% of the students were satisfied with the steps taken by the accommodation they were staying at during the pandemic. This compared to just 25% of students living in the wider private rented sector. It also found that around 73% would recommend first-year students to opt for purpose-built student accommodation (PBSA).
An increase in the levels of satisfaction with private accommodation during this period demonstrates that operators are building stronger outcomes for students in the long run, especially through high-quality service provision and scheme design.
Safety and quality — A priority
In more recent times, safety has taken precedence over pricing, with students now willing to spend more if they feel that it is worth it. According to a report by Knight Frank, more than 80% of the residents said that, on top of their existing rent, they would be prepared to pay a premium depending on the cleanliness of the bedroom, the overall quality of the accommodation, and the amenities offered.
A shift in room type preference
There is a higher chance that students will opt for single occupancy rooms and studios, mainly driven by the need to practice social distancing. This also means that the accommodations will include a range of privacy at different levels in the number of studio rooms over shared rooms and the number of students allotted to a particular room. This design strategy will benefit the students and the provider — offering students their much-valued privacy and the accommodation increased flexibility.
Student needs accelerated digital transformation
The pandemic has propelled the need for landlords and operators to adopt technology and digital processes to ensure tenants’ safety. Whether it is through an online system or an app, students are now looking for convenience over anything else. On top of that, providers are making sure that the students remain connected at all times, whether with other students or with the onsite staff. They are even encouraging interactions by curating virtual events where residents can get acquainted with one another.
Balancing physical and mental wellbeing
While mental health problems have always been prevalent, the pandemic has accentuated the issues related to wellbeing that students would normally have and further sparked new anxieties amongst them. The importance of student wellbeing — both physical and mental — has come to the forefront and a lot has been done to keep students connected so they don’t feel they are in this alone. This has encouraged operators to engage with students and support them while they were isolated from their friends and families.
If you were to ask me, I’d wholeheartedly agree that these measures to support student wellbeing will increasingly feature in the ESG (Environmental, Social, and Corporate Governance) agenda for investors in this particular asset class. This is one of the reasons why operators are taking this opportunity to make a significant difference to the mental as well as physical health of the students they accommodate.
With accommodation playing a major role in the decisions students make on where to study, even in the times to come it will increasingly influence the decisions among graduates on where they choose to work. At this point, it would be interesting to observe the shift in the next few months as many operators will move away from their previous offerings and attempt to bring about a change in their current model, while still trying to cling to their profit margins.