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PBSA Supply to Exceed 700k Beds

Posted by Richard Ward

PBSA Supply to Exceed 700k Beds
The latest data from StuRents indicates that, as of June, almost 23,000 new purpose-built student accommodation (PBSA) beds are being advertised for the 2020-21 academic year.

Assuming all those schemes in the pipeline that are currently being marketed do come to fruition this year, then PBSA could surpass 700k bed spaces for the first time with private operators controlling more than 50% of supply. Furthermore, with c.80% of developments in the pipeline likely to be managed by private enterprises, the share of accommodation managed by universities is likely to shrink even further in the years ahead.

Whilst the total number of new beds currently equates to year-on-year growth in all PBSA supply of 3.4% (2019: 5.5%) the final figure is likely to change between now and the start of the academic year. Split by accommodation type, private PBSA is currently scheduled to grow by 5.7% year-on-year, whilst university accommodation is due to expand by 1.1%.

Figure 1: New PBSA beds by location & type (2020-21)
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In the current climate, some developers have decided to postpone the delivery of new schemes, thereby reducing the number of developments that will become operational this year. This includes the decision by Unite Students to preserve cash by deferring the delivery of two schemes due to be built in London and Bristol.

Similarly, to conserve cash during this time of uncertainty, Empiric Student Property has pushed back the delivery of three developments until market conditions stabilise. The developments include Emily Davis in Southampton, a refurbishment project in Canterbury, and St Mary's in Bristol, with a combined total of 519 beds. Watkin Jones on the other hand is still planning to deliver a total of six schemes by Q3-2020, with a seventh due to be complete in Q4-2020.

Some of the largest schemes being marketed for 2020-21 include the huge 1,023-bed Onyx development in Birmingham, as well as the 976-bed White Rose scheme in Leeds. The former is to be managed by Fresh Student Living, whilst the latter is to be operated by Unite Students. On a locational basis, more than 4,000 beds have been earmarked for delivery this year in Coventry, a market that is highly exposed to a drop in international students. In London and Leeds, more than 2,000 units are due to hit the market, whilst Nottingham is set to receive over 1,400 new beds. On an operator basis, Fresh Student Living is to manage the largest share of new beds, with the total equating to more than twice as many as CRM Students in second place.

Figure 2: New PBSA beds by operator (2020-21)
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With the true impact of coronavirus on full-time student numbers still largely unknown, new supply entering the market will find itself in a truly unique and therefore challenging environment. Understanding how supply is likely to change for 2020-21 as well as the underlying seasonality within a given location, can help operators make more informed decisions regarding their marketing strategy for the new academic year.

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About StuRents:

- StuRents is one of the leading proptech partners in the UK student accommodation space

- StuRents operates, the largest student-centric accommodation search platform, listing over 750,000 bed spaces nationwide

- Beyond search, StuRents facilitates integrated online tenancy signing, tenancy payments and app-based tenancy management solutions

- This unique, vertically integrated end-to-end solution underpins StuRents' data insights and research capabilities