GOVERNMENT INITIATIVES SET TO DRIVE GROWTH IN HIGHER EDUCATION
Following a period of uncertainty in the UK higher education landscape due to Brexit uncertainty, a new International Education Strategy has been announced by the Government. The strategy, which was created in consultation with stakeholders across the educational spectrum, includes two targets for 2030, as well as a policy change regarding international students’ ability to work after graduating. The targets for 2030 are:
- To nearly double the value of education exports to £35bn ($46bn), which will require an average annual growth rate of 4% through to 2030
- To increase the number of international students to 600,000, compared to the circa 460,000 enrolled now in British higher education
The policy change ensures that all undergraduate and master’s degree students will be given unrestricted post-study work rights for six months, with doctoral students able to work for 12 months after graduating.
This new Government initiative is very positive news for both the higher education and purpose-built student accommodation (PBSA) sectors in the UK. Student demand is not growing as fast in the UK as it is in Europe. However, it is compensated by the market’s maturity, size, and high level of reliability among investors.
Moreover, growth in international student enrolment continues to drive demand for high-quality student housing in the core cities in which GSA has investments, such as Birmingham, Bristol, Edinburgh, Liverpool, and Sheffield, which all achieved 100% occupancy in 2018.
Global investors continue to acquire PBSA assets, fundamentally underpinned by the UK’s world-renowned higher education system. In 2019, GSA will be launching four new assets across three new cities in the UK. These schemes are Bailey Point (550 beds) and Belaton House (398 beds) in Bournemouth, as well as Anglia House (219 beds) in Cambridge and Clifford House (312 beds) in Exeter.
Coupled with the already very positive letting progress across UK residences for the 2018/19 academic year, we anticipate that the ongoing high levels of investor demand for the sector will combine to underpin portfolio valuations for GSA.