Operating in Student Housing - Beyond The Stay Podcast

Guest experts

  • Sarah Canning - Co-founder The Property Marketing Strategists they work with clients (developers, investors, operators) to develop their marketing strategy. Sarah has worked in property for almost 20 years, and 13 of those years has been specifically in Student Accommodations

  • Martyn Roe - Managing Director at Blytheswood Consultancy - specialist PBSA advisory company providing asset management, development management and investment management services to a variety of institutional and private equity clients across the sector. Martyn has been involved in this company for the past 13 years and has more than 25 years in the student accommodation sector, having been one of the original directors at Unite.

  • Marcus Roberts - Director at Savills in Operational Capital Markets division. Marcus has been Leading the growth of Savills Operational Capital Markets platform across Europe. Focusing on the ‘Operational Residential’ space including Student Accommodation, Co-Living, Multi Family, Single Family, Senior Living and Healthcare on a pan-European basis. Marcus brings a wealth of experience (20 years) in the student housing sector.

  • Philip Hillman - Philip has been involved in student housing since the early 90s. Currently he is a consultant at JLL, as well as a Non Exec at Staykeepers and SLE Global.

In this episode, we dive into:

  1. Student Operators performance during Covid in the UK
  2. EU Student Accommodations performance during the pandemic
  3. The role technology plays in the Student Housing Sector
  4. The necessity to Integrate flexible lettings (short stays) as part of your core strategy and not think about it as an after thought
  5. The future of the student housing sector


About the Beyond the Stay Podcast

We explore all things build to rent, student accommodation and the private rental sector. From overcoming challenges, to bettering the industry and future predictions with leading guest experts.

Full Transcript

[00:01:03] Philip Hillman: So looking at coming out of COVID it was a traumatic period for many operators, because when you think about it, the one scenario we never really anticipated looking ahead with potentially all universities being shut and locked down and students told to basically go home.

[00:01:21] Philip Hillman: Martyn, could you just perhaps give some perspectives on how you think operators during COVID and you know, did, did they do well, has the sector perhaps, you know, demonstrated capabilities or has it been a rough ride and we've still got a lot to learn?

[00:01:38] Martyn Roe: Well, I mean, I think the first thing you've got to say is they definitively did not, did not do well. And it was, it was almost impossible to do well in a situation where most buildings were, I would say on average, 20% physically occupied in, in many situations Revenues were improved beyond the 20% level, whether that might be because there was a nomination as agreement in place or, or for other reasons operators didn't do well because they were embroiled for, for the period in providing refunds to students as a result of.

[00:02:14] Martyn Roe: A campaign, if you like. And that gained imp impetus around refunding students who were not in occupation or were not receiving an education. So that obviously hit the bottom line. Very significantly. So I would say most owner-operators we're dealing with, with negative cash flows break, even at best.

[00:02:34] Martyn Roe: During, during that period with the exception of those who had significant nomination agreements. Portfolio. And we're able to transfer the pain of that on onto universities to to a greater or lesser degree. I think one of the, one of the things that you would call beneficial in some ways is that many people chose to use the opportunity to carry out refurbishments that were on building.

[00:03:02] Martyn Roe: We're otherwise difficult to bring in because of occupancy. And so, you know, if you wanted to do any kind of major refurbishment of a building and you were limited to eight weeks in the summer, it made life quite difficult. So there was a lot of upgrading of, of, of properties that took place during that period.

[00:03:21] Martyn Roe: So that, that was definitely a beneficial impact on will, will be reflected on, on cashflow. Go go going into the future. And I guess we're going to come on to talk about the other, the other impact in this conversation around about the realization that they had to be flexible around about the letting process.

[00:03:41] Martyn Roe: And that is something that I think is carrying on into the. Post pandemic period for a variety of reasons, which I suspect we'll come on to

[00:03:51] Philip Hillman: talk about. Thanks. Martyn had just one perspective for myself and perhaps taking a slightly different view in terms of how the operators did. Yes, they will suffer.

[00:04:01] Philip Hillman: Significant hits on occupancy, but I think it's quite to credited the sector. Many of them were able to take a decision to refund or to give sort of rent holidays to, to their students. Now it wasn't totally consistent. I think it was a process that unite kicked off with offering a certain rent-free period effectively for students up to a certain point.

[00:04:26] Philip Hillman: And then. Others followed and joined for some parties. It was difficult because they have multiple owners in that portfolios or investors. So to get a consistent approach was quite a challenge because there were considerable financial implications. But I, I personally feel that the, the operators, to some extent, they almost came of age during COVID in that they started acting like a real hospitality.

[00:04:51] Philip Hillman: Managers rather than just building managers. And it really felt to me that the sector was moving much more into the hospitality situation. Interestingly, some of my directors at work where we're saying, oh, student housing, it's really in trouble. You know, it's in there with the hospitality sector. It's having a terrible time.

[00:05:11] Philip Hillman: Actually, I felt the point was it wasn't the same as hospitality. Now, decision to go to university is not like a decision to go for a long weekend in Vienna or something. Yeah, this is something that was yes. Going to have a hiccup, but actually the resilient demand was, was, you know, still there, underneath.

[00:05:30] Philip Hillman: And as soon as people wanted to and were able to get to back to university, they were only too keen to do it. And so we saw quite a rush faculty. To student housing.

[00:05:40] Philip Hillman: So the recovery has been very rapid. And as I say, I think it's quite remarkable. The extent to which operators felt able to, to some extent bite the bullet, but also to take a long-term view. Marcus, well, how was it in Europe?

[00:05:55] Marcus Roberts: What I was going to say? I think that's very much the, the UK view, I think in Europe is similar story was probably a little more we were setting up be very upbeat in Germany and Netherlands where I think occupancy did drop slightly, but not to the extent that it did in some with some, with some operators in say, Which were probably very much more focused on the international demand, which was over here, which is obviously compounded by by, by the inability to travel.

[00:06:26] Marcus Roberts: So I think that's where we probably need to look at you know, when you're looking at the market. What is your product type where's that aiming at? Is that domestic market, or are you looking at the the, the international market resources, certainly sort of Germany, Netherlands Benelux showed some particular resilience with many schemes, sort of high nineties percent occupancy throughout that, throughout that period of time absorbed also because of the type of product that it is, it's pretty much what was very much more sort of studio.

[00:06:57] Marcus Roberts: Rather than some more of a sort of by cluster led format, where there may have been more challenges around sort of mixing students in in cluster schemes rather than on a studio product.

[00:07:08] Philip Hillman: Sarah, I'd be interested in your perception from a marketing viewpoint as to how you feel the sector has come across. Over this last COVID early post COVID.

[00:07:20] Sarah Canning: Well, two years ago, when a pandemic hit, I was marketing director at Student Roost. So I was living and breathing the reactions from, from the students. And I cannot emphasize enough from an operational point of view, what a challenging time that was for all the teams involved.

[00:07:35] Sarah Canning: I can speak personally for me and my team and the rest of the Student Roost team, but we were literally working around the clock 24 7 dealing with student concerns. At an and, and it was disturbing, you know, it was the, the, the, the kind of things that the students were going through and were feeling you know, was, was, was really terrible.

[00:07:52] Sarah Canning: And we had to make, make a stand. So we're one of the first to react and to, and to refund students, but actually safe in it. What we actually saw once people realized that this wasn't a two week period or a temporary solution, they did want to come back and they realized that living with their parents actually wasn't that great an idea.

[00:08:10] Sarah Canning: And, you know, as soon as they could come up, I did. I think the other thing that hasn't really been publicized enough really is how many students stayed within the buildings and the service had to continue. The staff had to continue. Events continued, you know, albeit remotely. But. This is the perception that the buildings were empty and the students had all fled.

[00:08:31] Sarah Canning: And that certainly wasn't the case. That's not what we saw at all. So it was kind of twofold. It had to be business as usual onsite, or be it at a slightly different service offering. But also a complete shift to the communication side of things. You know, per particularly And, and it, and it, and it did change things, you know, for, for forever.

[00:08:50] Sarah Canning: I think, I think the way that teams have worked within businesses, the communication side of things, and the listening to the students and the flexible side of things, I think still could develop further. But I think we certainly started to make a good, a good start to it. Over the last couple of years.

[00:09:07] Philip Hillman: Thank you, Martyn, what are you seeing in terms of the UK post COVID situation, how are, how are the operators getting on how a building's letting and what's the, what's the, sort of the feeling about occupancy going ahead?

[00:09:18] Martyn Roe: I would say that we are at the same level as we work post COVID. If you take, if, if you take the current, the current booking situation for the, the 2223. Most operators are probably ahead of, of what they would perceive to be an average year pre pandemic, but not significantly ahead. So I think rebooking this year have been very normal, very normal levels.

[00:09:48] Martyn Roe: And if you don't, if you don't take a nomination agreements into account, people are pro buildings are probably saying. Plus, or minus 45% occupied at this point in the year. And you would, you would probably take as a, as a fairly healthy to tone 35% by Easter. So it's all looking pretty, pretty positive, I would say on that, on the lettings run.

[00:10:11] Martyn Roe: And, and obviously all of that is linked to applications and the level, the level of student applications remaining at. Record levels in, in in, in the current cycle.

[00:10:25] Philip Hillman: Okay. I'd like to just switch tacks slightly now and start thinking about some of the permanent changes we might be seeing in the student housing sector, both in the UK and in Europe and indeed around the world.

[00:10:36] Philip Hillman: How is technology being used by operators and indeed by architects and others to change the way student housing works?

[00:10:47] Philip Hillman: So I'm very interested perhaps Martyn, if you'd just have some thoughts on. What you're seeing now in terms of how, how the world's changed and, and how technology is being introduced.

[00:10:58] Martyn Roe: Yeah. And I think the first thing to say, isn't this probably with the direct impact of, of, of COVID, there were a number of processes in the, in the, in the accommodation management sphere that were partly manual that have become entirely.

[00:11:15] Martyn Roe: Digital. And that, that, that was. I think to a great degree because of trying to limit the amount of face-to-face interaction that was required during that period. And so the book, the, the bookings process and the move in process, a lot of operators moved from part. Part digital part, manual process to an entirely digital process and having made that investment in their systems see no reason to, to, to go back to the way it was before.

[00:11:48] Martyn Roe: And I suppose the other thing that probably happened from a technological perspective as if Broadband and its quality within the building was not important enough. I think it's now recognized through it, through the experience of students during the pandemic DEMEC period as being even more important because of their wholesale reliance on, on it, and important site on it for, for non face-to-face, remote, remote learning.

[00:12:15] Martyn Roe: And so those, those would probably be the two key. Technology impacts. I think coming out of the pandemic,

[00:12:21] Philip Hillman: Sarah, you saw things at the sharp end with Student Roost you were telling us about to what extent was the, the digital world becoming very much tied in with the way you marketed and the way students experienced accommodation in Student Roost.

[00:12:36] Sarah Canning: Yeah. I mean, I think at the time the, the digital perspective definitely accelerated and actually what we're seeing more and more is students really want that face-to-face again? No, so I think we've all got to bear in mind as an industry, not to be a hundred percent reliance on technology and human contact is still really, really important for students.

[00:12:55] Sarah Canning: We conduct a lot, a lot. Of research and the students are talking about that loud and clear, particularly, and we're dealing with complaints or maintenance issues. They don't want to feel like they're anonymous that there are a number. So I think it's really important to have that, that balance that actually technology can make Processes easier and more seamless, but it's gotta be backed up with, with, you know, with the human element and not a complete reliance on, on technology.

[00:13:20] Sarah Canning: What I would say, however is through my work as marketing consultant, I think build to rent are doing it a lot better. I think some of the things in their building that they've kind of accelerated with and probably because they didn't have it before, and a lot of them are brand new and have been able to kind of evolve.

[00:13:36] Sarah Canning: With a, with a cleaner slate, really. I think some of the processes that we're seeing in their buildings regarding technology you know, should be really aspirational for the PBSA market.

[00:13:44] Philip Hillman: That's very interesting. Marcus, you've got a view on that. Yeah.

[00:13:47] Marcus Roberts: I was going to ask Melissa about some more sort of a voice controlled technology sort of around sort of lighting door entry systems or is that sort of around the sort of physical and sort of mental wellbeing, which obviously is something that is really sort of some being driven from over the last sort of few years particularly over the, through three.

[00:14:04] Sarah Canning: I've seen some really clever things with, for example parcel collection and storage, which takes the onus off the operational staff so that they can be freed up to do that face to face communication things around events and things around security door entry. Comfort lighting, comfort, heating et cetera.

[00:14:21] Sarah Canning: We're doing a big research project at the moment. I'd be very interested to find out that the results of how students feel about smart technology. But also I think at the moment, we're seeing a bit of a lack of connection with technology and sustainability which is one area that the industry is gonna have.

[00:14:36] Sarah Canning: To me move forward with, and that might be student facing, or it might be back office. You know, but I think, I think there's been good improvements, but there's, there's, there's a lot more that the industry could do a thing with technology.

[00:14:47] Philip Hillman: Okay. On the marketing side, I'm just curious Sarah, as to whether the majority of students are basically going for an online virtual experience in choosing their accommodation, or are they turning up at the show flats and, and you know, doing a tour, et cetera, it's a bit

[00:15:06] Sarah Canning: of both.

[00:15:06] Sarah Canning: So obviously you know, one area that I think PBSA I have done quite well and we still see it emerging really is the fact that international students in particular have to rely on digital. There's a bit of a difference in quality sometimes with virtual tours and video tours. And that's still emerging, which I think you know, With moving towards the metaverse and, you know, things that we can't even imagine, you know, that's going to accelerate really, really quickly.

[00:15:31] Sarah Canning: However, you know, domestic students that are often visiting with family and fisting university open days, and still wanting that, that face to face that physical you know, journey. And I, and I, and you know, we, you know, I'm sure that we can see that in retail as well. There's been a move, you know, back to the high street where people, you know, have.

[00:15:49] Sarah Canning: Didn't things factually the same with, with hospitality. So, you know, this is no difference, really a nice that it's just that the balances of virtual versus.

[00:15:57] Philip Hillman: At a recent conference, the the student housing conference, there was a speaker on what generation Z expect and will expect. And he was particularly focusing on the fact that generations that are really expecting the glass to be smashed that divides the virtual and the and the actual, the analogue and the digital so that people will not be expecting it to be either a choice of one or the other, but the two will become seamless.

[00:16:21] Philip Hillman: And I suppose that's what. That's why he's changing the company name to Metta. His metaverse is, is going to be something which in all aspects of life, including student and lettings and Colin MPRs that we're going to see Martyn, sorry. I think you were just wanting to

[00:16:36] Martyn Roe: Sarah, whether, whether she sees a danger at all, that some operators might have identified potential savings through, through, through the introduction of technology to do things that.

[00:16:50] Martyn Roe: Effectively the human beings would otherwise have done. Just, you know, from an operational perspective to save money and to reduce the number of people that are required in the building. Is there a danger from your point of view that, that, that some operators might go down there?

[00:17:04] Sarah Canning: Definitely. I mean, the example I just gave about parcel collection, for example, the industry historically has been very reluctant to automate it because actually having your front of house staff, dealing with parcels brings a touch point for the students.

[00:17:20] Sarah Canning: You know, a wellbeing point of view that you know, that you can check that you've seen the student that they're, you know, responding to, to, to their emails, et cetera, et cetera. However, I think, you know, there's. People for people's sake. And then there's the quality of interactions as well. And, you know, you could all give it, just having someone dealing with parcels all day.

[00:17:39] Sarah Canning: You know, is that actually creating meaningful interaction with the students and helping their wellbeing in any, any way. And therefore by automating that it could either, you know, Staff potentially from having that role or repurposing them into more kind of meaningful roles and improving that face-to-face experience you know, with the resurgence of kind of co-living and kind of community management and community facilitators, you know, that would be one area that, you know, it shouldn't be seen as a cost saving.

[00:18:08] Sarah Canning: It should be, you know, people should be spending more on that to kind of bring that human real life. Interactions back again, really?

[00:18:16] Philip Hillman: So not just a virtual on ch but actually someone who recognizes the students by name perhaps would be an example of the way to get

[00:18:24] Marcus Roberts: I'm going to, I think, sorry, just, just quickly.

[00:18:26] Marcus Roberts: I think from over the last sort of 20 years or often the, the, the, the one, the one job employee role that, that keeps on coming back as being probably one that is most important within, within all of. It's the cleaner because they get to sort of go into the room, go into the flat, see what condition it is.

[00:18:46] Marcus Roberts: If the students there, they, they are always having that maybe sort of daily or a weekly touch point that we're talking about and they can get a fail that actually. You know, there is a problem there either. You know, the guy's never been there. Hasn't been there for Goldman. It hasn't been there for a week or actually it is in such a state.

[00:19:06] Marcus Roberts: There's obviously something that is sort of mentally wrong, that they can go report that back to a sort of.

[00:19:14] Sarah Canning: Yeah, the only thing I was going to add about kind of, I guess, staffing and technology is you know, staffing is the biggest operational cost, you know, to, to the building and to keep the cost high and keep it.

[00:19:26] Sarah Canning: So keep the service high, the cost is, is high from that point of view. I think it, I think where technology can play a role potentially is by bringing a more affordable. Out to the market. And that's not saying that the surface should be different, but there are ways of automating things and doing things a lot of cost using technology, you know, rather than people.

[00:19:45] Sarah Canning: And that just is a different model. I don't think it would replace what's currently out there. But we would like to see, you know, more diversity in product and price for the student. You know, and the obvious way of, of doing that is with technology. Martyn

[00:19:59] Philip Hillman: you had a comment. It's

[00:20:00] Martyn Roe: just that I think there is a link back then to what we were talking about before, around about the whole welfare point.

[00:20:06] Martyn Roe: Marcus raised the point about trainers is that one of the coming back to, to pandemic and COVID is many operators now have effectively identified a specific role. Around about welfare and mental health and it's come center stage. And I think that is a really big impact because I don't think I would have been no matter how, how big a building would have ever come across somebody whose role it was to deal with welfare.

[00:20:37] Martyn Roe: That was something that was a part of. A breadth of services provided by the accommodation management team. So I think that that must be a positive impact.

[00:20:45] Philip Hillman: So if we could, perhaps, as we look to perhaps wrap up, can we think specifically on that point, we mentioned earlier about flexible letting terms.

[00:20:54] Philip Hillman: We suggested that COVID had perhaps accelerated the offer. Of more variable, flexible terms. And that was obvious because there were empty rooms and people needed to fill them. And so they were forced into it, but are there some pros and cons perhaps for the landlord operator and for the student in a slightly more flexible offer?

[00:21:17] Philip Hillman: I mean, I'd be very interested from an operator perspective as to what people think will be happening in the future. We've seen it as a, as a result of COVID and arguably a more sophisticated view of the whole operations lettings procedure. But what are we going to see in the future? Are we going to just actually, when demand gets high, we'll revert back to it.

[00:21:38] Philip Hillman: Hey, it's 51 weeks. Take it or leave it.

[00:21:39] Sarah Canning: I might be being a bit controversial here, but I think the trouble with flexible terms is that it's not a strategic decision at the moment. It's very much a knee-jerk reaction and you know, Plan A is academic contracts. And when that doesn't go well, then there's a pivot to, oh my God, let's look at short term lets but you know, from a strategic point of view, No, we would love to see more collaboration from, from the planners from the likes of Staykeepers, you know, to really consult on that because actually buildings can do this really well and operators can do this really well.

[00:22:10] Sarah Canning: If they all worked together at the very beginning, it's much, much harder to, to try and shoe horn flexible. Terms and short term contracts into a building. That's not geared up for it. Now, the buildings need store storage facilities, for example, for the, you know, for extra bedding and linen they need you know, the, to have allocations, right?

[00:22:31] Sarah Canning: You know, the last thing you want is you know, is short-term students coming into a flat where there's been full-time students there that's never going to work and it's not great for the dynamic of the building. But the solutions are out there. But I think it just needs to be part of the core strategy rather than a knee-jerk reaction when things aren't going well, because I don't, I think there's been a bit of a bad rep for short term.

[00:22:53] Sarah Canning: lets and flexible lets that? It's because you failed on plan a or it's a, you know, it's, it's some kind of You know, if you had to pivot because something's not gone right in your core strategy, but actually this is just absolutely great for students. It's great for operators, but it has to form the core strategy.

[00:23:10] Philip Hillman: I think that's a very instinct point, Sarah. Been the case that as you say, some are less in many situations have been seen as something you sort of just have to do. It's a bit of a pain, but it's operating income. If you can get it great. Whereas actually in many locations, some are, is a particular opportunity to achieve some significantly enhanced rentals.

[00:23:36] Philip Hillman: And so the real trick is how can you do that seamlessly? Integrated into your lettings pattern over the whole year. How can you do it in a way that doesn't make. In any way, prejudice the experience of the students there during what you might call the main academic letting period. And that's, I think where everyone's been just sort of learning on their feet a bit, this last few years, as companies like Staykeepers have started.

[00:24:03] Philip Hillman: Offer a service of, of managing that that short let experience and uh, finding people to come in and fill those rooms. So those issues have sort of one by one gradually are being addressed, but you're right. It would be great if there was a proper strategy rather than it just being a, a knee-jerk reaction to what, what should we do now?

[00:24:24] Sarah Canning: One thing that we're seeing where we've just done some research with a university I'm afraid to say they're still not doing face-to-face learning. And you know, I think that's something that's probably not been highlighted enough that it's still it's still going on. And the students, therefore the ones that can commute.

[00:24:37] Sarah Canning: All for one day a week for their seminars. Now, the, actually what they want is to be able to live in student accommodation one or two nights a week, because they're missing out on the social side of things. They're not able to access some of the social events or the facilities on campus, because then they're not going to come in and commute for an hour and a half, but you know, any other day of the week you know, but actually, you know, there's a fantastic opportunity there to kind of recapture those maybe commuting students.

[00:25:03] Sarah Canning: And it might just be for two or three. A week. You know, but that's that kind of commuter student is increased over the last few years and it, and it, it might until universities, you know, go back to proper face-to-face learning. You know, so that's just one example of actually how. Oh, practice and student and university accommodation you know, can actually help students get what they want.

[00:25:26] Sarah Canning: Cause they do want to be there, but they just, you know, financially it's not viable if they're only on campus one day a week.

[00:25:35] Marcus Roberts: We were looking at it from the, from the operator perspective, from the, from the investor standpoint and probably the lender as well. If they are after that relatively sort of, sort of benign sort of safe, secure income stream on an annualized basis, that is why they, they want to invest it into the sector.

[00:25:54] Marcus Roberts: So having shorter, you know, semester lets it sort of whilst economic. There may be an enhanced rental price point that they could, they can generate it also, there's an additional cost attached to it. So I it's last additional risk is.

[00:26:11] Philip Hillman: But are we seeing something of a, a change there going on? And if you look at Cola, for example I know it's, you know, it's relatively small scale in the UK.

[00:26:19] Philip Hillman: But we are seeing, you know, much shorter letting periods there, obviously, because that's very much in the nature of, of, of many Colin, digital nomads, if you like, they're going to just want to place possibly for a few months or even a few weeks or something. So that's, I think, you know, investors are looking at that and saying, yeah, that's okay, because you're, you're planning your business around that.

[00:26:38] Philip Hillman: And, and maybe some of the PRS operators are looking at something of a hybrid between the and the traditional assured shorthold tenancy for 12 months or whatever. As we going to see more flexible offers from, from some of those who, particularly when they're offering accommodation all over the country, or indeed around the world I was thinking of, of node Neil Kira's business, where.

[00:26:58] Philip Hillman: You know, you can go to one of their buildings in New York and then one of their buildings in London, if you're that way, you know, you can afford it. But yeah, I just feel as though there is a change going on and I think some investors. Okay, I'll get their heads around it, for sure. They

[00:27:14] Marcus Roberts: certainly are.

[00:27:15] Marcus Roberts: And that sort of comes with the, with the territory in that living space that they want to diversify their funds into. I think what we'll find is that need, you look at say TSH, a pristine hotel. I mean, they they're that sort of hybrid model of and that sets a good, a good example. And I think what you may find is that now where investors have, or operations have two buildings in a particular city, maybe one is more focused on the long, stay one on the on the shorter side, whether you can get that flexible flexible occupancy or flexible, then.

[00:27:46] Marcus Roberts: Lessing period in a, in

[00:27:48] Philip Hillman: a particular location, it's interesting with Jean hotel, but they, they're not only giving up a student accommodation and then her Telekom sedation outside of the main term time to non-students, but they're also very much focusing on co-working. As well, in fact, so you really getting a completely hybrid sort of micro city center, living experience community as in the co live, but also with these very flexible terms.

[00:28:14] Philip Hillman: And I, it will be interesting to see at the moment there's a process going on. There is as their investors look to to, to potentially change their involvement with, with that company. I think we'll be learning a lot about how invested. Consider this more flexible process through how that goes Martyn and any perspectives.

[00:28:32] Martyn Roe: I think this is going to ultimately be driven to a degree by the universities and the question of hybrid versus face-to-face because, and under one scenario the university. At some point, presumably must become fearful of, of students tend to min around about remote learning and the lack of that social experience.

[00:28:54] Martyn Roe: They, they must become fearful about impact on tuition fees. And I guess they must become cook nice and of their staffing levels and whether. Teaching stuffing levels might change in accordance with whether it's face-to-face or hybrid or remote. And so I think that will be the driver on this and, and Scenario where we do get a potential return to face-to-face teaching, which which wouldn't be a shock.

[00:29:22] Martyn Roe: Then I think that then the question of 42 weeks, 51 weeks, going back to the norms arises. So I'm, I'm certain that there will be some degree of flexibility going forward across the board, but, but whether it will be quite as. Quite as significant as as we're contemplating in this discussion. I'm not so sure when it will be driven by the university strategy on teaching

[00:29:47] Philip Hillman: universities do seem to be going for multiple start points increasingly on courses, particularly some courses which would attract international students.

[00:29:56] Philip Hillman: So in the UK, we're seeing quite a, a big entry point now in January and in London, if you're in the market doing PBS, there is definitely a window to do lettings in January to certain courses. There's also an increasing number of semester or longer courses that aren't necessarily all year. And there is the whole Group of language schools, et cetera, who aren't necessarily wanting a, a 12 month period, but we'd like a few months for their students to take a accommodation.

[00:30:24] Philip Hillman: So I think that's one area where I think we are seeing more flexibility. It's in part, as you say, Martyn driven by what the universities are looking for some of their specialist courses, it may not necessarily be a traditional sector. Start. And I wonder, you know, as, as we, as I said, as we close this, as we just wonder, what's, what's really going to be so different.

[00:30:46] Philip Hillman: If we were talking five years from that, what are we going to see about our sector? That looks totally different from what we've got now? I said, perhaps individually, we could perhaps do that crystal ball gazing exercise.

[00:30:58] Martyn Roe: Start on that because it relates kind of to what we were just talking about it.

[00:31:01] Martyn Roe: I think one, one thing that will emerge. And it goes directly to the flexibility of tenancies will be collaboration between universities whereby you won't necessarily attend a single institution on a single campus. And you may actually receive your education in two different countries, over a period, or even, even within a year.

[00:31:20] Martyn Roe: And so I think. I think that collaboration and that kind of flexibility around the physical place that you learn in will inevitably mean that you don't want a year's tendency. If you're going to be three months in the Netherlands and three months in London. So I think that's that, that, that is something that I can very much see happening in the future.

[00:31:41] Philip Hillman: Sarah. Sorry. Let's just get, so I

[00:31:44] Marcus Roberts: just got to say, just building on that, I think in terms of the European markets mountain, you're absolutely right. Because historically a combination has just been left to, to the students, to the private sector in Europe. No, the universities have very little, I've had very little interest in, in accommodation.

[00:32:03] Marcus Roberts: And I think as the product. As the operators have matured and continue to mature, and the product becomes far more embedded in in the culture, in, in student culture. So the universities will be embracing it more and we're likely to see leases, nomination agreements, and so on and so forth in the European market with European leading universities, et cetera.

[00:32:29] Sarah Canning: I don't know if it's a reality, but what I would like to see is much more collaboration to get the product right. For it, for the end user. So, you know, like, like Martyn was saying it's to do with, you know, the universities and how they're going to teach, but it also filters through their fore, into planners and councils.

[00:32:45] Sarah Canning: You know, because there are implications on not having full-time students in your building, but also it's a link between the government because the government are really, really. Apprenticeships and, you know, further education you know, and that, you know, we're all excited about the 18 year old boom in 2030, but actually that might not result in university students.

[00:33:04] Sarah Canning: It might result in Hartford in higher apprenticeship princesses, but at the moment they're excluded from PBS and accommodation because they're not full-time, you know, students and, you know, therefore the product needs to become more flexible. The prices need to the contract length. But then backed up, we'll buy that is technology, you know, a lot of property management systems don't deal with short term.

[00:33:27] Sarah Canning: That's very well at all. You know, talking about different start dates, but the courses are part of the reason why it's probably not part of the strategy is because the systems just, just it's computer says, no, the systems quite often don't know how to deal with this, but then it comes to marketing as well.

[00:33:41] Sarah Canning: So, you know, there's very, very few channels from a marketeer to appetite. A non-core course and also the marketing budget, you know, when you've got a load of empty rooms, but you're meant to be marketing for the following academic year. Where's that budget to advertise the empty rooms and the websites need to be able to deal with it as well, which is very.

[00:34:01] Sarah Canning: And misdemeanour industry. So you know, this is, you know, the next five years, I think it needs to be a whole collaborative approach to, to a very, very, you know, potentially very, very different product and a very, very different type of customer.

[00:34:13] Philip Hillman: I think that's very seeing Sarah. I wonder whether over the next five years or possibly slightly longer, but not too much longer, we will see.

[00:34:21] Philip Hillman: New entrance into the university market. So we perhaps see more private players as you might call them coming along with a more specific offer. We've seen the likes of Google and Microsoft and others talking about creating, you know, bespoke universities that perhaps give a more intensive experience focused on technology hands-on experience, et cetera.

[00:34:43] Philip Hillman: And I wonder what that will do. I also wonder whether we might begin to see the idea of the three. Degree course being perhaps very nice for those who can afford it, but whether we'll see a more compressed two year offer or even shorter on a budget where the, you don't have the long holidays, much more intensive use of the accommodation what will that mean for providers in terms of the you know, the amount of accommodation required must be an impact there.

[00:35:12] Philip Hillman: Even with the potential for people to go on, to study rather than the university to go and do vocational courses that increase in number of 18 year olds is so dramatic between now and 2030 that I still think there's going to be a huge demand. For student accommodation for good quality student accommodation.

[00:35:33] Philip Hillman: And then lastly, my thought is obsolescence. We all know that ESG issues are coming to the fore, both in terms of buildings of operation. And in terms of the way investors are looking at And I think that sustainable sustainability issue is going to come to the core. So what's going to happen to some of the older, more dated students stock at the moment, some of the big operators are selling it off to operate it.

[00:35:57] Philip Hillman: So we're going to give more of a budget offer, arguably, or perhaps I'm going to do a bit of a reefer. There's a lot of embedded carbon in some of those old buildings. What are you going to do? Are you going to knock them down in due course? Or you just go. Can you not build and rebuild them above the first floor or what are you going to do?

[00:36:12] Philip Hillman: These are issues that I think will have huge implications on the sector. Any last comments from everybody before we finish? Sarah, anything else you'd like to add?

[00:36:26] Martyn Roe: Well, I'm glad that you ended on ESG because I said I was, I was thinking as we were talking how surprising it was that we got through 35, 40 minutes and it really hadn't been a, a key part of our conversation in terms of the future.

[00:36:40] Martyn Roe: I think it is. It is the biggest, the biggest thing, if we, you know, if we ask ourselves what the question, what will students be looking for? Out of their accommodation in the future that commitment among, among the younger generation to, to, you know carbon reduction is, is absolutely huge. And it's not obviously just in student accommodation, it's, it's in built around and all forms of buildings.

[00:37:08] Martyn Roe: So I think, I think the adaptation of the second. To recognize that in, in, in not too long, a period students simply will not live in a building that does not have sustainability credentials. And they will choose to live elsewhere is, is right at the top of the

[00:37:27] Philip Hillman: list. There is a suggestion that students will they'll demand that, but they won't want to pay a premium.

[00:37:37] Philip Hillman: Yeah, we've done

[00:37:38] Sarah Canning: some research on this and that's very much the view of, of the student and the main that they're not seeing the benefit for them personally. You know, and again, maybe that's something to do with, you know, technology and future investors, you know, maybe, you know, we need to go back to, you know, meet metering you know, students rock all-inclusive if bills, I think that'd be doing pretty well out of all inclusive bills and certainly with within the next year or so.

[00:38:01] Sarah Canning: You know, after that, for them to have some kind of I did active, conscious decisions around best if their own personal sustainability, they want to see a benefit and, you know, with all-inclusive bills and PPFA, they're not seeing that.

[00:38:14] Marcus Roberts: Yeah. I was just going to say, I mean, that's all, it all comes the.

[00:38:17] Marcus Roberts: And can with construction costs of the way they're going is only going to be added onto rent and it's, how can we keep all these great ideas, but, you know, it's all going to be one end of the of the cost spectrum, and that's going to be on the

[00:38:29] Philip Hillman: rent. So look everyone, thank you very much for listening.

[00:38:34] Philip Hillman: So thank you Martyn. Thank you, Marcus. Thank you Sarah, for your inputs. Thank you very much for listening into this Staykeepers PBSA podcast.

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