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UK Student Housing Could See Distress In 2021
Some smaller, independent student accommodation providers in the U.K. could go bust in 2021 as a consequence of the COVID-19 pandemic, offering opportunities to some larger players, according to industry experts. The sector has had a turbulent year following the impo
BY
Realty Plus
Published - Monday, 04 Jan, 2021
Some smaller, independent student accommodation providers in the U.K. could go bust in 2021 as a consequence of the COVID-19 pandemic, offering opportunities to some larger players, according to industry experts. The sector has had a turbulent year following the imposition of a national lockdown in March that closed universities and prompted thousands of students to vacate their accommodation. Several of the sector's larger players offered affected students rental refunds for the period.
The pandemic appears to have had a significant impact on occupancy across the sector during the first semester of the 2020/2021 academic year. The three largest listed U.K. purpose-built student accommodation providers, Unite Group PLC, Empiric Student Property PLC and GCP Student Living PLC, reported occupancy of 88%, 70%, and 69% respectively.
U.K. student accommodation providers have been hit particularly hard by the number of international students who chose not to come for the 2020/2021 academic year due to travel restrictions and concerns about the pandemic. The U.K. is one of the largest markets in the world for international students, who make up 20% of the total student population, 54% of full-time taught postgraduates and 49% of full-time research degree students.
Booking data showed a 29% fall in U.K. student accommodation bookings by international students, according to a report published in October by international student housing marketplace Student.com and global market research firm Bonard.
Many operators are hoping January will bring the arrival or return of many students who are currently studying remotely, said Russell Hefferan, partner, student accommodation capital markets at real estate services firm Cushman & Wakefield. The successful rollout of a COVID-19 vaccination program could also be key to putting struggling operators in "a more comfortable position with their lenders" by Q2, he said.
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