The UK Purpose Built Student Accommodation market has exponentially increased in recent years. Knight Frank's most recent 2023 Student Property Report revealed that investment in Purpose Built Student Accommodation totalled £7.2 billion in 2022, demonstrating a 69% rise year-on-year. Much of this growth is being driven by increased demand from Chinese students seeking the opportunity to gain a degree overseas.
While UK universities own large portions of PBSA developments, due to unmet demand and rising student numbers (in particular post-pandemic) they are relying on the private sector to fill significant gaps in their provision with increasing frequency. In 2019, the number of beds operated by private providers surpassed those managed by universities.
A new global survey has found that student accommodation occupancy has now returned to pre-Covid levels in popular Western student destinations, and with the continued under provision of - in particular first year accommodation - the opportunity within this sector continues to soar.
International students accounted for 22% of the total UK student population in 2020/21. In 2021, 32% (the majority) of the total number of international students in the UK came from China, meaning there are roughly 143,820 students from China in the UK.
International students tend to opt for convenience over everything else when considering their choice of student accommodation. In 2022, international students were shown to typically prefer housing with amenities like public gyms, central parking, lobbies and convenience shopping.
As University-owned accommodation tends to be legacy (older and less capable of supporting these plug-and-play benefits) it can hold less appeal. Additionally, it is harder for an international student to commit to housing that may not be available to them 365 days a year, as is often the case for University-owned accommodation.
Increasingly globalised economic and socio-political relations in Western countries have stimulated high demand for student accommodation in these countries.
The PBSA market has not been susceptible to fluctuations in macro-politics and continues to be a profitable investment.
Sustained investment from international developers indicates a focus on the main European cities, which continue to go from strength to strength in terms of PBSA success.
The 2021-2022 academic year saw international student numbers swell by an average of 3.7% across Europe. This figure was up by 2.5% year on year. Cross-border mobility resumed for students as travel restrictions were lifted in the wake of the pandemic, and the desire for study abroad was rekindled.
While the desire to invest in some of the “big hitter” cities for students within the UK (London, Manchester, Birmingham, Exeter, Bristol, Edinburgh etc) is valid and remains high, there are also many growing opportunities that could be seen as flying under the investment radar.
In recent evaluation of the UK’s leading student accommodation search, property management and data platform, StuRents, Allsop made the case for Glasgow (a Russell Group city with a huge student population), Preston (where huge student population growth dramatically outstrips accommodation), Newcastle (which appears to have “course corrected” a little too harshly in terms of PBSA) and Portsmouth (where a lack of quality HMO is creating a gap in the market.)
As these current trends show, the market for PBSA is currently looking exceptionally favourable. For those operating within the market, with the largest international student population (especially in Western Europe) Chinese students are likely to make up the largest proportion of your sales.
In order to capitalise on this burgeoning market, WeChat represents the most popular and familiar social platform for your Chinese audience. In order to build the best relationship and lay the foundation for an impressive and impactful customer experience, WeChat marketing will provide the best ROI.
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If you’re looking for a solution that solves key marketing pain points, especially those related to curating effective customer journeys for Chinese students, VIVA CITY can provide you with specialist advice and technical resources.
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