Universities, and education more broadly, have been one of the most disrupted industries in the country in the midst of the Coronavirus epidemic.
Schools, universities and all other places of education have been closed until further notice with students unable to complete their normal studies and courses. There have been some that managed to continue by holding classes online, but there has been nothing like normality since March.
This has raised some interesting questions and issues surrounding student property and investment into Purpose Built Student Accommodation (PBSA), in whether landlords should still be seeking rent from students, and also about when things are expected to return to normality.
On rent payments, it should be said that each situation is individual and will require individual approaches. With regards to universities getting back to some sense of normality, it’s more than likely that September will bring some sense of a return, with most institutions looking to apply social distancing where appropriate come the new terms.
That should allow most students to either return or start tenancies in student accommodation around this time too, and so it follows that there will be a return to relative normality later this year, given what we know at the moment, and what we expect to happen.
There have already been encouraging evidence and stories coming from Europe where some of the Nordic countries and Germany have successfully re-opened primary schools with a view to opening secondaries in the coming weeks.
There is also very little evidence that the reproduction rate of the virus has increased after these countries lifted their lockdowns, so the signs so far are very encouraging that European countries now have things under better control.
On to PBSA then, and the view across the sector appears to be that there will be some short-term disruption to the market but in the longer-term things will return to some kind of normality and there will even be sustained growth.
Empiric Student Property PLC, one of the largest providers in the country, released data last week saying that whilst they anticipated a drop in income this year, and that they’ve actually seen an increase in demand for the forthcoming academic year in September.
As reported in the Morning Star, “the company noted that 55% of its student accommodation bedrooms continue to be occupied by residents despite university closures.” And the company also saw increases in bookings from UK students, as well as seeing their share price increase this week.
That should be seen as a huge sign of stability and health for the sector, and the market as a whole, given that many others are struggling, and to see share prices, investment levels and demand actually increasing is a sure sign that there will be a sustained and strong recovery.
It’s been something of a rough year for investors more generally, but those involved in student property have had a more profitable and stable time for some years now.
Despite some initial concern, it now appears that the sector will ride out the short-term storm and come back in even ruder health.