The Changing Shape of Scotland’s Student Accommodation

Sandra Cummings
The provision of student accommodation is an ongoing challenge for higher education institutions and their estate planning teams.

Universities remain under considerable pressure to deliver accommodation for growing student numbers. Students, not to mention their parents who may well be footing the accommodation bill, expect fair allocation of rooms that enhance the student experience, and are pleasant, safe, affordable and conducive to study.

In England there has been a substantial shift towards private sector developments in recent years, especially in London and other larger cities. For developers, student accommodation has proved a counter-cyclical investment, remaining resilient and stable during the downturn. On some schemes the developer works speculatively and independently, acquiring the site and securing planning permission, and on other schemes the developer is in partnership with an institution.

Here in Scotland we have seen some private sector activity, but, especially in areas where land availability is less of an issue, most institutions seem keen to retain control over the building and operation of their own residential provision. University-led accommodation has continued to be built during the downturn, often with the opportunity for clients to benefit from competitive contractor rates. However, current BCIS tender price indexes shows that this position has now changed with an excess of 10% inflation predicted by the end of 2015.

Faithful+Gould UK Tender Price Index (TPI) forecast

Forecast Date
Faithful+Gould 2Q2014
3.00% 4.00% 4.50% 4.50%
BCIS 2Q2014
6.20% 4.70% 5.20% 5.30%

Predicting future capacity and forecasting future revenue streams are two of the main challenges. Scotland's institutions face additional uncertainty as a result of the forthcoming independence referendum. Independence could potentially affect the way Scotland's tuition fees are handled, either preventing EU students from accessing the fees waiver (reducing student numbers) or making it unlawful to charge students from the rest of the UK (reducing income). The government could decide to charge all students the same fees but offer Scottish domiciled students a grant equal in value to the fees.

Location of residences can also be problematic and there is ongoing debate about the impact of high student populations on local communities and the overall housing mix in university towns. Local councils don't always welcome student accommodation developments and they are of course under pressure to provide their own housing for non-student residents. Identifying suitable sites can therefore be challenging.

The range and balance of accommodation types are changing and evolving. Most institutions are looking for ways to build more variety into their portfolio...

The site will of course also depend on the facilities to be built. The range and balance of accommodation types are changing and evolving. Most institutions are looking for ways to build more variety into their portfolio, with configurations for specific groups, notably student families and disabled students, becoming an important part of the mix. In the more typical cluster units for five or six students, en suite provision has become the norm, while catered accommodation continues to decline.

Accommodation quality is now a significant differentiator during the applications cycle. Students and/or parents paying both fees and accommodation bills has led to a culture of higher expectation. Security, on-site gyms and proximity to the university campus/main buildings/city centre where appropriate, are all likely to be scrutinised in addition to the internet access, choice of en suite or shared facilities, and kitchen space that are now standard expectations.

The international student sector continues to expand and attracting a proportion of these higher fees is important to most institutions. Private partnerships offer new ways of extending global reach, with universities providing academic and English language preparation courses prior to enrolment on traditional undergraduate or postgraduate courses. These additional student numbers also bring additional demand for accommodation.

With government funding diminishing, replaced by a complex picture of alternative revenue streams, estates strategies face tough challenges in delivering value for money. Facilities are typically now aimed at maximising revenue opportunity. This means multiple suitability, meeting the needs of conference hirers, local communities and often tourists, as well as students and staff.

I find that clients are now more focused on a holistic portfolio strategy, rather than a fragmented building-by-building approach.

I find that clients are now more focused on a holistic portfolio strategy, rather than a fragmented building-by-building approach. Whole life value, not just capital costs, is very important and good energy performance is now a given. Modern methods of construction can bring added value benefits, with en suites, for example, typically installed as pods, and scope for innovation in other parts of the construction too. Clients are eager to gain new insights from within the sector – I have accompanied clients on a tour of other universities and this can be an excellent way to establish innovation and best practice in their new development.

Faithful+Gould has led multi-disciplinary design teams in the higher education sector for many years, helping institutions find the most cost efficient solutions to their estate planning. We have led student accommodation delivery across the UK, helping clients provide over 10,000 bed-spaces in the last 10 years. In a competitive and complex situation, we help our clients explore their needs, identify the best procurement option, navigate funding mechanisms, and deliver quality residences on time and within budget.

In Scotland, my team leads a range of student accommodation projects, from new build to renovations and cyclical maintenance. With the summer vacation now ending, it's an especially busy time for most of our clients, as we handover projects needed for the new academic year. We have successfully delivered 720 bed-spaces for the University of West of Scotland over three sites, and are currently developing 788 bed-spaces for another Scottish university. This is the largest capital development undertaken by the University since the creation of the campus in the 1960s. It's an excellent example of the continued evolution of a university campus providing high quality residential student accommodation.

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