University operators are hoping for a much-needed bounce in
leasing deals over the next few weeks as a fresh wave of students prepare to
start courses on the back of today’s A-level results.
With pandemic-related uncertainty over demand for student beds,
owners and operators of university property have been fearing a drop in income
when the new academic year begins next month.
Yet today’s A-level results are expected to trigger an
active period for the UK student accommodation sector, with over two thirds of
all applicants still to confirm their course.
“From an investment perspective, there are signs that activity
is picking up and students returning to university is a welcome sign. Leasing
activity for purpose-built student accommodation remains strong, with over 70%
of private beds already let for September 2020,” said James Kingdom,
a UK research associate at JLL.
He added: “Total bookings are ahead of where they were 12 months
ago, largely as a result of existing students rebooking, and demand from new
students is also up.”
On the back of today’s A-level results, Knight Frank has
released a snapshot survey of six of the largest UK student accommodation
operators who between them control 170,000 beds in the sector –25% of the
Currently bookings look to be between 70% and 85% of what was
expected for this cycle overall.
The average across the operators surveyed is 77% of beds booked
for this coming cycle.
Operators across all markets will be gearing up for what is
likely to be a more important clearing period this year with the expectation
that more students will be placed at university through this process, the
Neil Armstrong, joint head of student property at Knight Frank,
said: “The results of Knight Frank’s snapshot poll demonstrate students’
ongoing commitment to go to university this year, despite the challenges of the
Coronavirus pandemic. PBSA operators have seen higher levels of demand than
first anticipated, and are going into the ‘clearing’ process with an average
occupancy rate of 77%.
“Considering the ongoing market headwinds, underpinned by the
strict social distancing measures and restrictions on international travel, it
is reassuring to see that PBSA is weathering the storm well in terms of both
occupancy rates and investor appetite for best in class accommodation assets.”