GCC Region's Schools

John Lione
High demand for school places is a continuing problem for the GCC region’s expatriates – and an opportunity for education operators, investors and financiers.

Gulf Co-operation Council (GCC) countries have the world’s fastest growing private education market. Strong population growth, continued economic expansion and the arrival of international schools has seen the sector value rise to US$15 billion [1]. The growth may not be fast enough for incoming expatriate families, who find that the demand for private school places far exceeds supply, especially in the case of primary schooling. Secondary school places are more plentiful, but many well-established and reputable schools remain heavily oversubscribed.

The private sector dominates the education landscape in the UAE, with 88.7 per cent of Dubai’s students enrolled in private schools.

The private sector dominates the education landscape in the UAE, with 88.7 per cent of Dubai’s students enrolled in private schools. While government-funded schools teach in Arabic and cater largely for Emirati students, the prosperity of local families and higher educational aspirations mean that many now prefer to educate their children in English in preparation for overseas universities. As a result, 56.6 per cent of Dubai’s Emirati students are now in private schools [2]. Educational programmes vary with national curricula from the UK, US, India and the UAE Ministry of Education catering to 90 per cent of the private school student population in the UAE. The number of students at UK curriculum schools is the highest, with 70,000 students or 31.5 per cent of all private school enrolments [3].

The newcomer in the regional education sector is the elite international school. Many families are attracted by the reputation of these prestigious schools and the prospect of an affiliated campus on their doorstep. Demand for boys' and girls' boarding at private schools, five or seven days a week, has also intensified from locals and expatriates across the Gulf.

The education sector is attracting increased investor attention, from private equity companies, investment banks and overseas schools keen to explore investment, expansion and partnership opportunities.

The UAE is now also recognised as an attractive destination for higher education amongst emerging market economies. Private sector western universities are experiencing high growth at 15-20 per cent per annum compared to 2-6 per cent for non-western and government-aided universities [4]. The education sector is attracting increased investor attention, from private equity companies, investment banks (both traditional and Sharia compliant) and overseas schools keen to explore investment, expansion and partnership opportunities. This reflects the global demand for international schools places; Hong Kong, South Korea, Indonesia, Qatar, Malaysia and Singapore are also under scrutiny as investment opportunities for foreign providers.

New-build schools require extensive capital investment and best value is imperative to maintain a profitable operation. Keeping a school building project on schedule is vital in order to meet the school year start date, manage student applications/admissions and prepare and train staff. Any delay can cause significant revenue loss and damage a school’s reputation.

Whole-life costs are an important consideration in the commercial viability of a school, but, as with many projects in the region, these costs are often not fully considered until the school is up and running rather than during the preconstruction planning phase, when best value can be achieved. The appropriate whole-life costs choices will make an important difference to the investment proposition and can reduce operating costs.

Faithful+Gould brings global experience of supporting clients in the education sector, extending through nursery, primary and secondary schools and academies.

Faithful+Gould brings global experience of supporting clients in the education sector, extending through nursery, primary and secondary schools and academies. We were closely involved with the UK’s Building Schools for the Future programme. We have also advised central government on the cost of building to different levels of sustainability and our guidance informs the levels of funding available for school buildings.

We are also working on innovative commissions to provide extra capacity in UK schools, via standard pre-designed teaching blocks of between two and six classrooms. These are permanent buildings, not modular, with a design life of over 30 years. They are up to 30 per cent cheaper and six months faster to procure and build than traditional extensions, providing affordable, stand-alone, high quality teaching accommodation.

In the US our education portfolio includes 70 construction projects for the School District of Greenville County, South Carolina. In the GCC region, we’ve worked on Dubai’s flagship Taaleem school campus, Caledonian College of Engineering in Oman and King Abdullah University of Science and Technology (KAUST) in Saudi Arabia.

References

[1] Trends in Private Education Investment and Expansion in MENA 2013, IIR Middle East
[2] 2012-2013 Private Schools Landscape in Dubai, Knowledge and Human Development Authority, Dubai
[3] 2012-2013 Private Schools Landscape in Dubai, Knowledge and Human Development Authority, Dubai
[4] Trends in Private Education Investment and Expansion in MENA 2013, IIR Middle East

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