PBSA Occupancy Remains Resilient

Introduction

On June 6th, StuRents welcomed 150 leading industry experts at the iconic Gherkin in central London ranging from institutional investors, lenders and banks, to operators and property developers. 

The day-long event provided an open forum to discuss key topics such as data, property management software (PMS), technology and the current investor landscape.

The importance of quality data

Richard Ward, Head of Research at StuRents, kicked off the day by highlighting the conflicting nature of some of the data in the sector. Specifically, he focused on how, in the example of Coventry, using similar data can produce widely different conclusions. This dataset emphasises how independent, quality data is critical for the sector as it becomes more sophisticated and as it gains traction with new entrants.

Footnote: Historically, many in the sector have looked at supply vs demand in the context of the number of students vs PBSA beds. However, this is far too simplistic and assumes all students want to live in PBSA. It therefore suggests all locations are under-supplied (left-hand chart). In the example of Coventry, an independent analysis of similar data but instead tracking changes to supply and demand over time can lead to the completely opposite conclusion, i.e. too many beds have been delivered relative to demand growth, leading to an oversupply (right-hand chart).

Utilising data covering more than 150,000 PBSA beds, insights were presented on the year-on-year performance in PBSA booking velocity. StuRents recently released its National PBSA Occupancy Report which showed occupancy remains healthy despite operators experiencing challenges in securing bookings. According to those participating in the survey, 43.3% of beds were booked as of March 2024, compared to 41.6% during the same period last year. Therefore, whilst there have been challenges in securing bookings relative to last year, at an aggregated level occupancy remains healthy. 

However, despite this positive message at a national level, there remain huge city-level differences. A good example of this is Glasgow, which recorded occupancy of 73% as of April, compared to just 32% in Coventry.

Other key data themes

• Studios continued to lease first, ahead of clusters. 
• Volatile student recruitment is contributing to differences in performance at a locational level
• Occupancy data is being used by operators and investors to understand performance and adjust rents where needed
• A lack of live demand data remains a challenge for the sector

Property Management Software

The summit also saw several panel discussions covering property management software (PMS), technology and the investor landscape. 

On PMS, a recurring theme for operators and investors was the inability to provide or report on data from their PMS in a timely and accurate manner. This was reflected in the audience poll, with attendees asked to rank from 1-5 “How easily can you report on or receive key financial data in a timely and accurate manner?”. The response was 2.4, a fairly mediocre result, highlighting the need for improvement. 

Other key industry concerns with legacy PMS included:

• Financial or investor reporting is lacking, with a number of investors not able to receive the information they need in a timely manner
• People and internal processes are key, software can only do so much
• Automation can free headcount to provide a better service, in turn, this can reduce costs through improved re-booker rates
• Dynamic pricing doesn’t exist in the real sense and changes are very much manual
• There remains a disconnect from some suppliers between the sales teams and the service provided, leading to the perception of over-promising
• Data migration between systems is a huge challenge, there is no standardisation 
• Those driving the change of PMS internally will have their own area of focus, which is not always aligned with the student experience. E.g. improved financial reporting could result in a poorer booking journey
• Focusing on getting the basics right is not sexy, but can lead to vanity projects that threaten basic functionality or add little value to the student experience
• Most of those who have changed PMS did not seek a referral or were not able to receive one - this raises the question of why and possibly a lack of due diligence when switching systems.

To find out how StuRents is solving the issues raised at the summit with our proprietary PMS, visit Concurrent. More information on our occupancy survey can be found via StuRents.com/Occupancy