Whether you agree or disagree with the idea that a monetised and marketised tertiary education sector values employability above almost all else, it’s an inescapable fact that when people are looking towards a university education they’re going to consider their employment prospects.
In the pursuit of seeking out the most effective investments in student accommodation, or Purpose-Built Student Accommodation (PBSA), it’s always worth taking into consideration where the drivers for demand are likely to come from, and it’s certainly true that employment prospects rank highly for many.
What that in mind, there are a few surprise inclusions and some surprise exclusions too, in that there’s no Russell Group universities in the top three, and only two in the top 10.
A good rule of thumb when considering cities and towns to invest in PBSA is to look at the current student population, average property prices, comparable yields and also potential for future demand. If we consider the University of Huddersfield comes out top of the list of graduate employability, with 96.4%, then that’s a pretty solid indicator that demand for that institutions courses will increase.
Huddersfield also enjoys relatively low initial investments with lower property prices and yields of up to 9% or higher. The student population in the city is roughly 40,000, with that number set to increase in the coming years. Investment into the university infrastructure has been growing also, with £74m pumped into the Kirklees College Waterfront Campus recently. In this sense a town like Huddersfield ticks all the boxes.
Conversely, consider that Oxford and Cambridge rank surprisingly low on the list, in 22nd and 23rd respectively, with only 75% and 69.5% of students finding employment after graduation. Couple that with the fact that entry price into the local property market is high versus the national average, yields aren’t as strong, and the student populations are unlikely to grow significantly, and we see the opposite to an up-and-coming place like Huddersfield.
The two Russell Group universities ranking highest in the list were Cardiff University and University of Leeds, at 3rd and 4th respectively. Taking Leeds from those two, the student population is roughly 70,000 with three large universities in the city. University accommodation is currently listed at 9,050 beds, leaving a massive short fall currently met by the private sector. Yields in the city are sitting roughly at 8% and property prices are competitive.
There are many that would argue reasonably that attending university should be in the pursuit of knowledge and learning rather than simply to go on to earn as much money as possible in the world of work, but the reality of situation is – and it’s key for investors – that students value future employability extremely highly.
For those considering entering the market or those seeking to expand their portfolios it’s something that could have a key influence over the success of your investments, amongst other things.
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