We are living through extraordinary times. The coronavirus pandemic has altered our way of life and challenged every business and sector, including purpose-built student accommodation (PBSA). Despite this uncertainty, our experience across multiple geographies has highlighted a common theme: that our residences are home to thousands of students who simply could not leave or chose not to. Moreover, the resilience of education, and its importance to families around the world, will continue to drive demand for the PBSA sector.
As the global economy recovers, it is going to be led by education at all levels. The pandemic will speed up economic and demographic changes that were already underway, requiring greater investment in new skills to take advantage of emerging industries and technologies. It cannot be overstated how important a strong higher education sector is for developing highly skilled human capital to enrich the broader economic environment.
This economic backdrop demonstrates the strength of our sector. Recent data from UNESCO has shown a 10-year growth rate per annum of 3.2 percent. If the current rate of growth in enrollments is sustained, we should expect to see well over 300 million students by 2030.
While the industry remains on a firm footing, we must evolve our customer experience to meet the developing needs of students, harnessing what we have learned through the crisis. For us, the global pandemic has confirmed that trust is the most important thing for our stakeholders, and especially students. What defines trust? The promise of security and wellbeing.
Covid-19 has provided an even greater opportunity to not only support students’ fundamental housing needs, but to offer them a community. The pandemic has demonstrated how living in isolation can be detrimental to health and mental wellbeing, which is why we have adopted technology to maintain our services during social distancing regulations. For example, we introduced ‘virtual receptions’ giving our students access to a member of our residences at all times; and we ran online wellbeing activities, which were especially important for those students isolating alone.
Looking forward, the requirement for accommodation tailored to the modern student will only increase, as their needs and expectations evolve.
Global demand requires investment
Finally, let us consider the current investment environment for PBSA. Student accommodation is demonstrating significant resilience as an asset class. The sector is proving robust and attractive for those seeking steady returns with exposure to non-cyclical assets.
As we consider future growth, GSA is seeing inflows from both new investors, as well as long-term partners increasing their exposure to alternative assets, which demonstrates confidence in the sector.
The outlook for PBSA is strong, underpinned by a resilient higher education sector, with student numbers growing globally. We are already seeing opportunities in different parts of the world, and I am confident that those PBSA providers that are well positioned will continue to meet the evolving needs of both the modern-day student and investors.
Nicholas Porter founded The UNITE Group, which became the largest owner of student accommodation in the UK, in 1991. He founded GSA in 2007 and serves as executive chairman.