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1、UK STUDENT ACCOMMODATION REPORT2023HEADLINESDEMANDINVESTMENTAFFORDABILITYSUPPLYTHERE WERE A RECORD 2023/24 IS THE HIGHEST YEAR FOR RENTAL GROWTH AT(PRIVATE SECTOR 9.39%)8.02%FULL-TIME STUDENTS STUDYING AT UK HIGHER EDUCATION PROVIDERS IN 2021/22(HESA)NATIONAL AVERAGE STUDENT TO BED RATIO STANDS AT S
2、TUDENTS SINCE 2013/14STUDENTS BY 2030THE NATIONAL DEMAND POOL FOR ACCOMMODATION HAS INCREASED BY CUSHMAN&WAKEFIELDS FORECASTING SHOWS THAT MARKET HEADROOM HAS THE POTENTIAL TO GROW BY A FURTHER 2.2MINVESTMENT VOLUMES IN THE UK PBSA SECTOR REACHED A RECORD IN 20227.4BN 2023 YEAR-TO-DATE VOLUMES CURRE
3、NTLY STAND AT COMPARED TO IN 20221.5BN 3.4BN THE AVERAGE SCOTTISH STUDENT WILL RECEIVE AROUND MORE IN FINANCIAL SUPPORT THAN AN ENGLISH STUDENT IN 2023/2428%CUSHMAN&WAKEFIELD PROJECTS TOTAL YEAR END VOLUMES FOR 2023 TO TOTAL 2.5BN TO 3BN NUMBER OF NEW BEDS BEING DELIVERED CURRENTLY STANDS AT ONLY 1%
4、PER YEARSOCIAL AND AMENITY SPACES IN NEW SCHEMES HAS INCREASED IN SIZE BY NEARLY 50%SINCE 2018/192.1:1294,000243,000THERE ARE CURRENTLYBEDS IN THE DEVELOPMENT PIPELINE NATIONALLY,OF WHICH OVER 74,000 HAVE BEEN APPROVED(57%)131,211 CARDIFF IS CURRENTLY THE MOST AFFORDABLE STUDENT LOCATION IN THE UKTH
5、E HIGHEST PRIVATE SECTOR RENTAL GROWTH WAS SEEN IN GLASGOW AT OVERTHE AVERAGE WEEKLY PRIVATE SECTOR RENT(EXC LONDON)STANDS AT BRISTOL HAS SEEN THE HIGHEST RATE OF PRIVATE SECTOR RENTAL GROWTH SINCE 2013/14 AT ALMOST50%THE AVERAGE UNIVERSITY RENT STANDS AT19%NET INCREASE IN BEDS FOR 2023/24 STANDS AT
6、 JUST8,760 BEDS2023/24 ENTRY DATA SHOWS A SEVEN LOCATIONS ARE NOW HOME TO MORE THAN2%FALL IN ACCEPTANCES15,000INTERNATIONAL STUDENTSDEMAND VS SUPPLY174.45158.5796%NATIONALLY,THE DEMAND POOL FOR ACCOMMODATION NOW STANDS AT JUST UNDEROVER1.5MOF STUDENTS REQUIRE A BED DURING THEIR COURSE OF STUDY,ACROS
7、S 74 KEY UK LOCATIONS.CONTENTS03.DEMAND-SUPPLY DYNAMICSP2502.SUPPLYP1904.AFFORDABILITYP4105.INVESTMENT&DEBTP5506.KEY CHANGES TO LEGISLATION P6901.DEMANDP06THE UK HIGHER EDUCATION SECTOR CONTINUES TO GROW,DRIVEN BY INCREASES IN THE PROPORTION OF APPLICANTS ACCEPTED,THE STRONG INTERNATIONAL APPEAL OF
8、THE SECTOR AND THE ONGOING ATTRACTION OF POSTGRADUATE STUDY.However,emerging evidence for 2023/24 entry indicates a return to pre-COVID patterns of recruitment,with political headwinds also likely to impact student numbers going forward.At the same time,the profile of demand continues to change rapi
9、dly with consequent impacts for both universities and accommodation providers.Looking forward,areas of the market have the potential to be affected by a range of factors over the coming years;potential falls in entry rates,policy shifts and the changing profile of demand across towns and cities.DEMA
10、ND01.GROWTH IN FULL-TIME STUDENT NUMBERS 2012/13 TO 2021/22LONDON79,320BRISTOL21,915LIVERPOOL16,105CARDIFF10,295LEEDS11,825NOTTINGHAM17,265MANCHESTER15,115BIRMINGHAM22,555EDINBURGH16,645GLASGOW22,155A transformation in postgraduate study-aided by the student loan system,visa changes and a desire for
11、 additional qualifications-means almost one quarter of students now study at this level.Despite this,overall growth in the system means there are still 18.0%more students aged under 20 than was the case in 2012/13.The past decade in the sector has been characterised by extraordinary growth and chang
12、e,with consequent impacts on the demand for accommodation(especially over recent years)which are explored throughout this Annual Report.Of 170 locations tracked by Cushman&Wakefield,23 have seen student numbers increase by 5,000 students or more since 2012/13,with 11 of these growing student numbers
13、 by over 10,000.10 locations have grown students from outside the UK by 5,000 or more.For two of these locations,this has meant an increase in student numbers of over 60%,transforming the local environment.15 towns and cities have seen overall student numbers fall by 1,000 more over this period.The
14、last two years alone have seen international students in London grow by 27,495,with students from outside the UK in Glasgow up by 8,165 over the same period.Seven locations are now each home to over 15,000 students,which remain the largest cohort of international students in the UK.THERE WERE A RECO
15、RD 2,226,580 FULL-TIME STUDENTS STUDYING AT UK HIGHER EDUCATION PROVIDERS IN 2021/22(HESA).GROWTH IN UK TOWNS AND CITIES OVER TIME 2019/20 TO 2021/22LONDON38,095NOTTINGHAM7,055GLASGOW12,550BIRMINGHAM6,045BRISTOL9,350HATFIELD5,190MANCHESTER8,410EXETER4,080EDINBURGH7,085BELFAST3,980Source:HESA/adapted
16、 by Cushman&WakefieldSource:HESA/adapted by Cushman&Wakefield7CUSHMAN&WAKEFIELD8UK STUDENT ACCOMMODATION REPORTGROWTH IN STUDENTS BY LEVEL OF STUDY OVER TIMELast years Annual Report outlined fundamental changes in recruitment by some institutions and the pivoting of a number of post-1992 institution
17、s to postgraduate recruitment,in light of stalling recruitment of undergraduates.SUCH TRENDS ARE CONTINUING,WITH POST-1992 FORMER POLYTECHNICS SEEING UNDERGRADUATE NUMBERS INCREASE BY JUST 630 BETWEEN 2017/18 AND 2021/22,COMPARED TO A RISE OF 54,170 ACROSS THE RUSSELL GROUP.Source:HESAGROWTH BY LEVE
18、L OF STUDY&UNIVERSITY GROUPING OVER TIMESource:HESA/Cushman&WakefieldUNDERGRADUATEPOSTGRADUATE2012/13 TO 2021/220120KFULL-TIME STUDENT NUMBER GROWTHOTHER53,40525,275RUSSELL GROUP113,63566,020POST-1992(FORMER POLYTECHNIC)74,89012,590OTHER POST-1992s35,86019,900+60.3%+11.9%UNDERGRADUATEPOSTGRADUATE201
19、6/17-2021/22GROWTH BY PROVIDERThe changes highlighted above mean that,despite a continued“flight to quality”institutions at undergraduate level,overall growth has come from a wide variety of universities especially over recent years.17 TOWNS AND CITIES HAVE SEEN POSTGRADUATE NUMBERS GROW BY 300%OVER
20、 THE LAST FIVE YEARSSource:HESAHE PROVIDERUNDERGRADUATEPOSTGRADUATELEVEL OF STUDYNUMBER OF CHANGE-5K015K10K5KTHE UNIVERSITY OF GLASGOWUNIVERSITY OF HERTFORDSHIRENOTTINGHAM TRENT UNIVERSITYTHE UNIVERSITY OF GREENWICHKINGS COLLEGE LONDONUNIVERSITY COLLEGE LONDONTHE UNIVERSITY OF EXETERTHE UNIVERSITY O
21、F BRISTOLTHE UNIVERSITY OF EAST LONDONTHE UNIVERSITY OF WEST LONDONFASTEST GROWING INSTITUTIONS 2017/18 TO 2021/22 DURHAM HAS SEEN THE LARGEST PERCENTAGE GROWTH IN UNDERGRADUATES SINCE 2012/13,GROWING BY 5,230 STUDENTSSIX LOCATIONS ARE HOME TO MORE CHINESE STUDENTS THAN THE OTHER 164 LOCATIONS COMBI
22、NED9CUSHMAN&WAKEFIELD10UK STUDENT ACCOMMODATION REPORTINTERNATIONAL STUDENT DEMANDContinued growth in international students and the implications of Government policy(explored elsewhere in this Annual Report)continue to impact on demand for both accommodation overall and the types of stock required.
23、Three key international groups,China,India,and Nigeria now account for just under half(49.23%)of all internationals,and the higher education choices of these groups differ wildly.339%GROWTH IN CHINESE STUDENTS IN GLASGOW SINCE 2012/13KEY INTERNATIONAL COHORTS BY BROAD UNIVERSITY GROUPINGRUSSELL GROU
24、PFULL TIME STUDENTS120K80K40K0201220162020CHINAINDIANIGERIA104,065 Chinese students now study at Russell Group institutions,accounting for 42.98%of all internationals at the research-intensive providers.At the same time,Chinese students account for only 9.09%of internationals at post-1992 universiti
25、es.All but one of the 10 institutions that have seen the largest growth in Chinese students since 2012/13 are members of the Russell Group.CHINAINDIANIGERIASource:HESA/Cushman&WakefieldPOST-1992FULL TIME STUDENTS80K40K0201220162020UNIVERSITY COLLEGE LONDONGROWTH IN CHINESE STUDENTS BY INSTITUTION(20
26、12/13 TO 2021/22)Nine of the ten institutions to have seen the highest growth in Indian students were incorporated after 1992.IN CONTRAST,OF 107,710 INDIAN STUDENTS STUDYING IN THE UK,ONLY 14.4%OF THIS COHORT STUDY AT RUSSELL GROUP INSTITUTIONS.Source:HESA09KCHANGE IN STUDENTSUNIVERSITY COLLEGE LOND
27、ON8,310THE UNIVERSITY OF GLASGOW7,085THE UNIVERSITY OF MANCHESTER5,885KINGS COLLEGE LONDON5,510THE UNIVERSITY OF EDINBURGH5,095UNIVERSITY OF THE ARTS,LONDON4,005THE UNIVERSITY OF LEEDS3,675THE UNIVERSITY OF SHEFFIELD3,395THE UNIVERSITY OF SOUTHAMPTON2,880THE UNIVERSITY OF BRISTOL2,855EGHAM,LOUGHBORO
28、UGH,AND DURHAM HAVE THE YOUNGEST STUDENT POPULATIONS IN THE UK11CUSHMAN&WAKEFIELD12UK STUDENT ACCOMMODATION REPORTGROWTH IN INDIAN STUDENTS BY INSTITUTION(2012/13 TO 2021/22)As outlined in last years Annual Report,the spending power of these cohorts varies wildly,with a far larger proportion of Chin
29、ese students willing and able to pay for quality PBSA.Additionally,the age profile of these cohorts varies considerably.WHILST OVER THREE QUARTERS OF CHINESE STUDENTS ARE AGED 23 OR UNDER,OVER HALF OF INDIAN AND NIGERIAN STUDENTS ARE AGED 25 OR ABOVE.Source:HESA06KCHANGE IN STUDENTSTHE UNIVERSITY OF
30、 HERTFORDSHIRE5,255COVENTRY UNIVERSITY4,840THE UNIVERSITY OF EAST LONDON4,685THE UNIVERSITY OF GREENWICH4,205ANGLIA RUSKIN UNIVERSITY2,985THE UNIVERSITY OF CENTRAL LANCASHIRE2,905TEESSIDE UNIVERSITY2,610KINGSTON UNIVERSITY2,305THE UNIVERSITY OF LEICESTER2,240SHEFFIELD HALLAM UNIVERSITY2,165LUTON,HAT
31、FIELD,AND MIDDLESBROUGH HAVE THE OLDEST STUDENT POPULATIONS IN THE UK5,230 MORE INDIAN STUDENTS IN HATFIELD SINCE 2012/13DEMOGRAPHIC CHANGE ACROSS TWO AREAS OF ONE MAJOR UK CITY(2019/20 TO 2021/22)These differences are impacting towns and cities across the UK,with particular changes over the last tw
32、o years.The chart below shows the extraordinary demographic change in two areas of one major UK city between 2019/20 and 2021/22.Analysis elsewhere in this Annual Report indicates consequent impacts on PBSA occupancy in“Area B”as a result of cohorts less likely to demand PBSA.IMPLICATIONS FOR TOWNS
33、AND CITIESAREA A06K3K-1K2K0CHANGE IN STUDENTSAREA BCHANGE IN STUDENTSNIGERIA85CHINA5,425CHINA-670INDIA685INDIA1,600NIGERIA755Source:Cushman&Wakefield/HESAUNDERGRADUATE APPLICATIONS AND THE 2023/24 ACADEMIC YEARAPPLICATIONS TO RUSSELL GROUP INSTITUTIONS THROUGH UCAS INCREASED BY 22.41%BETWEEN 2018 AN
34、D 2022,WITH APPLICATIONS TO POST-1992 FORMER POLYTECHNICS GROWING BY 7.54%.13CUSHMAN&WAKEFIELD14UK STUDENT ACCOMMODATION REPORTApplications to other post-1992 institutions grew by 6.76%.These trends mark a continuation of the“flight to quality”at undergraduate level.Markedly different trends are evi
35、dent in terms of acceptances,with all acceptances to the Russell Group growing by 7.47%and those to former polytechnics down by 0.42%.This is in contrast to a significant 19.34%rise in acceptances to other post-1992 universities.Trends across the Russell Group(and subsequent impacts on other univers
36、ity groups)are driven by a 10.35%decline in acceptances for 2022,following the unprecedented impacts of teacher assessed grades(TAGs)during the COVID-19 pandemic,with some institutions seeing main scheme acceptances fall by almost 30%as offers were released more slowly and strategic decisions were m
37、ade to protect the teaching and overall student experience.The system is likely to be further squeezed by emerging evidence for 2023/24 entry.Acceptances are at their lowest level since 2014,although just 1,000 below 2018&2019 at this same point in time.Both UK and international acceptances are down
38、 on last year,reducing by 2%and 1%respectively.The UK 18-year-old entry rate has declined for a second year in a row,down to 35.6%from a peak of 37.9%in 2021 but current levels are still historically very high as the sector reverts to a pre-COVID norm.The small reduction in internationals is largely
39、 down to Chinese acceptances decreasing by 9%on their peak in 2022.Whilst China is still by far the largest international cohort,Indian acceptances are up 13%.Reflecting the entrenched flight to quality highlighted in this Annual Report,higher tariff institutions have seen a minor increase in accept
40、ances,whilst medium and lower tariff institutions have declined.Higher tariff acceptances make up 33%of total acceptances versus 28%in 2014 whereas lower tariff institutions make up 34%in 2023 versus 41%in 2014.AS OF THE END OF THE CLEARING PERIOD FOR 2023/24 ENTRY,UCAS DATA SHOWS ACCEPTANCES ARE DO
41、WN 2%ON 2022 WITH 493,940 STUDENTS ACCEPTED FOR THE 2023/24 ACADEMIC YEAR.0100K200K200212022ACCEPTANCESALL ACCEPTANCES 2018-2022Source:UCASRUSSELL GROUPOTHER POST-1992POST-1992(FORMER POLY)2023/24 UCAS ACCEPTANCESUCAS ACCEPTANCES BY TARIFF BAND OF PROVIDER,2014-2023UCAS ACCEPTANCES210K120
42、K170K160K200202022 2023Source:UCASHIGHER TARIFFMEDIUM TARIFFLOWER TARIFF15CUSHMAN&WAKEFIELD16UK STUDENT ACCOMMODATION REPORTAMID CONTINUED GROWTH IN THE DEMAND POOL FOR ACCOMMODATION,THE PACE OF NEW DELIVERIES CONTINUES TO SLOW,INCREASING THE NUMBER OF STUDENTS UNABLE TO ACCESS A PURPOSE-
43、BUILT BED.THIS,AND WIDER ECONOMIC FACTORS,HAVE CONTRIBUTED TO UNPRECEDENTED LEVELS OF RENTAL GROWTH.THIS GROWTH HAS BEEN PARTICULARLY FELT IN PREMIUM DEVELOPMENTS AND ACROSS LARGE CITIES WITH LIMITED DELIVERY OF NEW BEDS,FURTHER SEGMENTING THE PRICING OF UK MARKETS.Quality of stock continues to rise
44、,with more amenity space than ever supporting the student experience.Whilst these schemes continue to be successful,there are clear concerns around affordability,particularly in the most expensive markets.SUPPLY02.NEW BEDS AND DELIVERYDELIVERY OVER TIMETHERE ARE 718,805 PBSA BEDS IN THE UK FOR THE 2
45、023/24 ACADEMIC YEAR,AN INCREASE OF JUST 8,760 ON 2022/23,CONTINUING THE RECENT DECLINE IN NEW BEDS ENTERING THE MARKET.In 2016/17,the number of available beds was growing at 5%per annum(a rate well above annual demand pool growth at the time)but has since slowed to just 1%for the last two years,inc
46、reasing pressure on the housing markets of many large student cities.However,the net increase in beds for 2023/24 is above last year,despite 6,027 fewer new beds being delivered,with the market experiencing far fewer closures.Just 12,195 new beds are opening for the 2023/24,the lowest year for PBSA
47、delivery for 10 years.The market is now seeing an acceleration in older university or first-generation private sector schemes being closed for refurbishment,with over 1,000 beds reopening this year and 2,200 expected to reopen in time for the 2024/25 academic year.16/1717/1818/1919/2020/2121/2222/23
48、23/24Source:Cushman&Wakefield Student Accommodation Tracker 2023/240%3%6%020K40K%NET GAINCHANGE IN HEADROOMNEW BEDSTOTAL PBSA MARKET GROWTHNo new beds have opened in major strong markets including Glasgow,Manchester,and Bristol(as well as Southampton and Newcastle),with only just over 330 new beds o
49、pening in London.Of course,constrained levels of new supply have contributed to the sharply rising rents explored elsewhere in this Annual Report.27 markets have seen new beds delivered,with just four markets(Nottingham,Edinburgh,Leeds,and Colchester)making up nearly half of all new supply.Leeds has
50、 seen more new openings than any other market,with 1,785 new beds for 2023/24.As has been the case for the last five years,the private sector is the driving force behind new deliveries,contributing 86%of new beds this year and 85%over the last five years.DIRECT LETUNIVERSITY OWNEDON-CAMPUS PARTNERSH
51、IPNOMINATED/LEASEDPBSA BEDS BY UNIVERSITY RELATIONSHIPSource:Cushman&Wakefield Student Accommodation Tracker 2023/2441%37%8%14%DESPITE STRUCTURAL LEVELS OF UNDERSUPPLY,STUDENTS APPEAR UNWILLING TO PAY FOR A“BED AT ANY PRICE”,WITH UNFILLED BEDS IN EVEN THE MOST CONSTRAINED MARKETS DUE TO THE IMPACTS
52、OF CHANGING DEMAND PROFILES AND AFFORDABILITY ISSUES.19CUSHMAN&WAKEFIELD20UK STUDENT ACCOMMODATION REPORTDEVELOPMENT PIPELINE,KEY LOCATIONSNUMBER OF PROPOSED BEDS020K35KUK DEVELOPMENT PIPELINEHowever,in the current environment,it is highly unlikely this number will be delivered to the market,with cu
53、rrent issues around build costs and financing meaning only around 16 markets(outside London)are able to support the blended rents required to ensure viability.Such issues are likely to mean continued constraints on new development,as well as the continued delivery of beds priced well above current m
54、arket averages.The number of new deliveries from key developers and operators continues to remain below historic averages at 1-2 per year.2024/25 will likely see 22,200 beds brought to the market,inclusive of 2,200 beds that will reopen in time for the start of the academic year.Just over half of th
55、e total pipeline can be attributed to five markets London,Birmingham,Nottingham,Manchester,and Bristol-with the largest three accounting for 40%.Just under half of all approved beds are due to be delivered across four major markets.THERE ARE CURRENTLY 131,211 BEDS IN THE DEVELOPMENT PIPELINE NATIONA
56、LLY,OF WHICH OVER 74,000 HAVE BEEN APPROVED(57%).Source:Cushman&Wakefield/UK local authoritiesAPPROVED BEDSSUBMITTED/PRE-PLANNINGLONDONLEEDSNOTTINGHAMBRISTOLMANCHESTERBIRMINGHAMEDINBURGHBRIGHTONCOVENTRYBELFASTDUNDEESHEFFIELDGLASGOWNEWCASTLECANTERBURYDURHAMOCCUPANCYOf the major UK markets,arguably Co
57、ventry has shown the most signs of occupancy issues,with only one sold out scheme.NO.OF SCHEMESSOLD OUT%BRISTOL292483%GLASGOW383079%EDINBURGH453578%CARDIFF251872%NEWCASTLE493571%LANCASTER181267%MANCHESTER503366%LEEDS462554%SOUTHAMPTON261454%LONDON1588151%Source:Cushman&Wakefield Student Accommodatio
58、n Tracker 2023/24AS OF THE END OF AUGUST 2023,41%OF DIRECT LET SCHEMES ARE FULLY SOLD OUT,WHILE A SIMILAR PROPORTION OF SCHEMES ARE ALMOST SOLD OUT.MARKETS THAT HAVE HISTORICALLY EXPERIENCED OCCUPANCY ISSUES SUCH AS NEWCASTLE,CARDIFF AND LANCASTER HAVE SEEN A CHANGE IN FORTUNES AND ARE NOW AMONGST T
59、HE STRONGEST FOR OCCUPANCY.Edinburgh,Newcastle,and Sheffield have seen a vast uptake in rooms in comparison to the rest of the UK post-A-Level results day,indicating strong levels of Clearing performance.Some previously stronger markets have underperformed,with Exeter and Nottingham only having arou
60、nd a quarter of schemes fully sold out and some discounting seen pre and post clearing21CUSHMAN&WAKEFIELD22UK STUDENT ACCOMMODATION REPORTNATIONALLY,THE DEMAND-SUPPLY IMBALANCE REMAINS SIGNIFICANT,WITH MARKET HEADROOM CONTINUING TO INCREASE,AIDED BY A CONTINUED SLOWDOWN IN THE NET INCREASE IN NEW DE
61、LIVERIES BEING BROUGHT TO THE MARKET.DEMAND-SUPPLY DYNAMICS03.Source:Cushman&Wakefield/HESASource:Cushman&Wakefield.Modelling includes an assessment of planned deliveries and anticipated exits from the marketPOOL/BEDS/HEADROOMSTUDENT TO BED RATIODEMAND POOL/SUPPLY/HEADROOMSTUDENT TO BED RATIO01.53.0
62、0800K1.6M13/1414/1515/1616/1717/1818/1919/2020/2121/22DEMAND POOLHEADROOMNUMBER OF BEDSDEMAND POOLHEADROOMNUMBER OF BEDSSBRWhilst first year students accounted for 42.5%of the national pool in 2013/14,this has now risen to 45.1%in 2021/22.Over time,international students have grown to comprise more
63、of the demand pool,rising from 29.4%to 36.9%over the same period.ACROSS THE KEY 70 UK MARKETS,DEMAND FOR ACCOMMODATION HAS GROWN BY 387,765 STUDENTS,WITH BEDS INCREASING BY 293,570(NET)OVER THE SAME PERIOD.MODELLED CHANGE IN NATIONAL DEMAND POOL AND SUPPLY(2020/21 TO 2030/31)LOOKING FORWARDCUSHMAN&W
64、AKEFIELDS LATEST MODELLING SHOWS THAT,NATIONALLY,THE STUDENT TO BED RATIO(SBR)HAS THE POTENTIAL TO RISE FROM 2.12:1 IN 2021/22 TO 2.24:1 IN 2030/31,RESULTING IN MARKET HEADROOM INCREASING BY 242,975 STUDENTS OVER THIS PERIOD.01M2M01M2.5M21/2222/2323/2424/2525/2626/2727/2828/2929/3030/2031Cushman&Wak
65、efield is forecasting a marginal slowdown in the rate of demand pool growth over coming years,yet headroom in the market is still set grow.However,market choice remains absolutely crucial;with investment success likely to be impacted by trends outlined elsewhere in this Annual Report,including the d
66、evelopment pipeline,growth trends,the quality and micro-locations of existing developments,affordability concerns,Government policy and the wider housing market.DEMAND-SUPPLY DYNAMICSNationally,the demand pool for accommodation now stands at 1,489,110,with 96.4%of students requiring a bed during the
67、ir course of study,across 74 key UK locations.EXACTLY HALF OF THE DEMAND POOL NATIONALLY IS LOCATED IN JUST 12 TOWNS AND CITIES.COMPOUND ANNUAL GROWTH RATE(CAGR)IN THE DEMAND POOL NATIONALLY SINCE 2013/14 STANDS AT 2.61%,WITH MARKET HEADROOM INCREASING BY 14.2%.THE NATIONAL STUDENT TO BED RATIO(SBR)
68、STANDS AT 2.12:1(WITH THE FIRST-YEAR RATIO STANDING AT 0.98:1).Excluding London,the SBR across the Russell Group stands at 2.00:1,with the demand pool for accommodation in these locations growing by 201,840 since 2013/14,with only 103,647 new beds(net)added to the market.Across London,the SBR stands
69、 at 2.52:1,growing by 77,855 since 2013/14,with 22,361 new beds(net)added to the market.25CUSHMAN&WAKEFIELD26UK STUDENT ACCOMMODATION REPORTEight markets have seen the demand pool for beds grow by at least 20,000 students over this period.The only three major markets to have seen a fall in the deman
70、d pool over this period have been Southampton(-3,035),Canterbury(-2,345)and Plymouth(-2,300).In terms of CAGR over the same period,Durham has delivered the strongest levels of growth of any major market,followed by Exeter and Bristol.LONDON IS FOLLOWED BY BIRMINGHAM(30,485),BRISTOL(30,020)AND GLASGO
71、W(28,625).As would be expected,London has seen the largest rise in the number of students in the demand pool between 2013/14 and 2020/21,with the number of students requiring a bed growing by 121,475 students.DEMAND POOL GROWTH OVER TIMEContrastingly,nine markets have experienced a negative demand p
72、ool CAGR over the same period,with two of these markets,Southampton,and Plymouth,showing positive demand pool CAGR between 2019/20 and 2021/22,and both now exhibiting positive signs of market recovery.Source:Cushman&Wakefield/HESA.Medium and large markets onlyDEMAND POOL CAGR 2013/14-2020/21DEMAND P
73、OOL CAGR0%8%4%DURHAM5.30%EXETER5.16%BRISTOL5.08%SWANSEA5.05%BATH4.77%COLCHESTER4.57%WARWICK4.02%STIRLING3.89%3.87%HATFIELD3.81%LIVERPOOLSALFORD3.80%3.69%NOTTINGHAM3.67%GLASGOW012K6KCHANGE IN HEADROOMBRISTOL11,925NOTTINGHAM10,840MANCHESTER8,120EDINBURGH7,365BATH5,070EXETER4,840SALFORD4,580LEICESTER3,
74、975WARWICK3,565YORK3,490STIRLING3,455LEEDS3,440MARKETS WITH NEGATIVE DEMAND POOL CAGR 2013/14 TO 2021/22When demand pool growth is measured against changes in PBSA over this period,market headroom in three(non-London)markets has increased by over 8,000 students.-1.0%0.0%-0.5%DEMAND POOL CAGRBANGOR-0
75、.33%HULLCANTERBURY-0.77%SOUTHAMPTON-0.79%PLYMOUTH-0.93%-0.51%LUTON-0.13%Source:Cushman&Wakefield.Excludes markets with fewer than 6,000 studentsSource:Cushman&Wakefield/HESA.Excludes London and HatfieldCHANGE IN MARKET HEADROOM 2013/14 TO 2021/22The sheer weight of demand pool growth vs change in su
76、pply in some markets over the last two years has resulted in huge strain on housing markets in some locations.27CUSHMAN&WAKEFIELD28UK STUDENT ACCOMMODATION REPORT010K5KCHANGE IN HEADROOMGLASGOW9,585BRISTOL7,325MANCHESTER6,160EDINBURGH5,205NOTTINGHAM4,105BATH3,350CAMBRIDGE2,945SALFORD2,300CARDIFF2,06
77、5SWANSEA1,945Source:Cushman&Wakefield/HESA.Excludes London,Hatfield&MiddlesbroughCHANGE IN MARKET HEADROOM 2019/20 TO 2021/22“DIFFICULT TO CAPTURE”DEMAND POOLSINTERNATIONAL STUDENTS AND MARKET RISKHowever,not all of this growth is necessarily beneficial for PBSA providers,with a number of cohorts“di
78、fficult to capture”.For example,nationally,fewer than 0.5%of beds are suitable for students with families and in some locations,actual demand for accommodation from these cohorts and other hard to reach groups is far lower than headlines suggest.Whilst markets such as Hatfield have seen huge recent
79、growth in the demand pool for accommodation,in reality,the health of the PBSA market is markedly different.This contrasts significantly with other markets where the number of difficult to capture students is relatively low.RECENT GROWTH IN STUDENT NUMBERS IN SOME LOCATIONS HAS RESULTED IN LARGE CHAN
80、GES TO THE NUMBER OF STUDENTS REQUIRING A BED SPACE IN SOME LOCATIONS.“DIFFICULT TO CAPTURE”DEMAND POOL ANALYSISSource:Cushman&WakefieldCAPTURABLE POOL DIFFERENTIATION TO OVERALL POOLSBRCAPTURABLE SBRHATFIELD-43.8%-7,9153.56:12.00:1PRESTON-33.2%-3,9202.00:11.34:1Linked to this analysis are markets w
81、here international students make up a large percentage of the demand pool for accommodation.Whilst locations such as London and Manchester have the largest overall numbers of students from outside the UK,some towns and cities with limited UK demand for accommodation see a large proportion of the ove
82、rall demand pool made up of international students.Of course,for less prestigious institutions,this may present a market risk,especially given recent policy changes and political messaging outlined elsewhere in this Annual Report.INTERNATIONAL STUDENTS AS A PERCENTAGE OF DEMAND POOLSource:HESA/Cushm
83、an&Wakefield080%40%HATFIELD78.17%PRESTON57.40%ST ANDREWS74.84%COLCHESTER54.74%HUDDERSFIELD66.76%HULL62.96%COVENTRY75.14%EDINBURGH55.04%LONDON68.82%SALFORD54.54%GLASGOW63.67%WARWICK58.21%29CUSHMAN&WAKEFIELD30UK STUDENT ACCOMMODATION REPORTSTUDENT TO BED RATIOOf course,changes in the demand pool have
84、to be considered in the context of the overall demand-supply balance and SBR.Huge development in some locations has resulted in fundamental changes to the SBR(and market health).Development in Coventry in particular has seen the SBR fall markedly,with the Coventry-Warwick ratio falling from 2.73:1 t
85、o 1.75:1 and the Coventry-specific ratio falling from 7.40:1 to just 1.34:1.THE HIGHEST RATIO OF ANY MAJOR LOCATION IS NOW TO BE FOUND IN DUNDEE AT 3.15:1,WITH THE LIVERPOOL RATIO CONTINUING TO REMAIN THE LOWEST OF ANY MAJOR MARKET AT 1.35:1.ALL-YEAR STUDENT TO BED RATIOS OVER TIME1.02.54.0BRIGHTONG
86、LASGOWCOVENTRY-WARWICKLONDONNOTTINGHAMLIVERPOOLSHEFFIELDBRISTOLCANTERBURY1.01.52.02.53.03.54.0BRIGHTONGLASGOWCOVENTRY-WARWICKLONDONNOTTINGHAMLIVERPOOLSHEFFIELDBRISTOLCANTERBURY2013/20142014/20152015/20162016/20172017/20182018/20192019/20202020/20212021/20222022/23F2023/24FSource:Cushman&Wakefield 31
87、CUSHMAN&WAKEFIELD32UK STUDENT ACCOMMODATION REPORTRENTAL GROWTHDIRECT LET NOMINATION10.42%6.10%PRIVATE SECTOR9.4%UNIVERSITY6.8%RENTAL GROWTHStrong student number growth in almost all major markets,rising operational and development costs,high inflation and a declining rate of new bed delivery has pu
88、shed overall rental growth to 8.02%for the 2023/24 academic year(university and private sector).Just two of the 78 private sector PBSA markets(Luton and Guildford)have seen overall rental decreases this year.Three smaller PBSA markets have delivered more than 20%rental growth with St Andrews leading
89、 the way at 26.46%.Glasgow has seen by far the strongest rental growth of all of the major markets at 19.42%,with operators able to take advantage of a market in the midst of a city-wide housing crisis and strong demand pool growth.One scheme in Glasgow has delivered over 80%rental growth in a singl
90、e year and schemes in the West End of the city have averaged a 40%uplift in rents since 2021/22 thanks to constrained levels of supply and extraordinary demand pool growth explored elsewhere in this Annual Report.Most major cities have seen double-digit rental growth with rents well above both infla
91、tion and increases seen in the wider rental market.However,this does not tell the whole story in terms of occupancy,with clear evidence that students are not willing to pay for a bed“at any price”.THE PERIOD 2022/23-2023/24 HAS BEEN THE STRONGEST YEAR FOR RENTAL GROWTH IN THE HISTORY OF THE SECTOR.S
92、ource:Cushman&Wakefield Student Accommodation Tracker 2023/24ABERDEENEDINBURGHBELFAST8.4%11.2%CARDIFFSHEFFIELDLEICESTERDURHAM12.3%8.9%6.3%1.8%NEWCASTLE12.6%NOTTINGHAMGLASGOW19.4%COVENTRY3.6%BIRMINGHAM6.7%8.2%LEEDS12.1%SOUTHAMPTON11.8%BRISTOL11.3%LIVERPOOLMANCHESTER13.4%6.9%11.6%LONDON11.1%PRIVATE SE
93、CTOR RENTAL GROWTH 2022/23 TO 2023/2434UK STUDENT ACCOMMODATION REPORT33CUSHMAN&WAKEFIELDRENTAL GROWTH BY QUALITYRENTS BY MARKETHIGH-END OPERATOR/OWNERS HAVE DRIVEN RENTAL GROWTH THIS YEAR WITH PREMIUM SCHEMES SEEING AN AVERAGE OF 12.5%RENTAL GROWTH,FURTHER INCREASING THE DIFFERENTIAL BETWEEN THE HI
94、GHEST QUALITY DEVELOPMENTS AND THE REST OF THE MARKET.However,rooms of all quality have delivered rental growth above CPI for this year.Premium operators have achieved rental growth well above the national average,with one provider averaging over 20%rental growth across its portfolio.Source:Cushman&
95、Wakefield Student Accommodation Tracker 2023/240%9%18%RENTAL GROWTH 22/23-23/24Source:Cushman&Wakefield Student Accommodation Tracker 2023/24,all rents are weighted and exclusive of catering costsWEEKLY WEIGHTED AVERAGELONDON AVERAGE PRIVATE SECTOR RENT LONDON AVERAGE UNIVERSITY RENTAVERAGE PRIVATE
96、SECTOR RENT(EXCLUDING LONDON)AVERAGE UNIVERSITY RENT323.07208.79174.45158.57543250WEEKLY RENT(23/24)CHANGE IN RENTS(21/22-23/24)Source:Cushman&Wakefield Student Accommodation Tracker 2023/24AVERAGE PRIVATE SECTOR RENT(WEEKLY)2 YEAR INCREASE IN RENTSLONDONEDINBURGHBRISTOLGLASGOWMANCHESTERN
97、OTTINGHAMSOUTHAMPTONUK AVERAGEBIRMINGHAMCARDIFFNEWCASTLESHEFFIELDLIVERPOOLNo other market has seen such growth in rents in the last two years as Glasgow,which until 2021/22,could be considered a“mid-priced”regional market in line with Nottingham,Birmingham and Leeds.However,extraordinary rental grow
98、th means rents in the city are now priced in line with outer London areas.Whilst private sector average rents still sit below those in Edinburgh,direct-let rooms now actually cost more in Glasgow for the first time.Bristol,Edinburgh,Manchester have also seen acute price changes with an average rent
99、now exceeding 200 a week.The continued segmentation of markets means less expensive locations such as Cardiff,Newcastle,Sheffield,and Liverpool have a real appeal,especially with the Student Maintenance Loan increasing at rate well below inflation.Rents in these Russell Group cities are now priced 3
100、0%lower than their highest cost peers outside of London.ROOM QUALITYHIGH QUALITY TO LOW QUALITY36UK STUDENT ACCOMMODATION REPORT35CUSHMAN&WAKEFIELDDYNAMIC PRICINGAMENITY SPACESAVERAGE WEEKLY RENT 2023/24(Q1)AVERAGE WEEKLY RENT 2023/24(Q2)AVERAGE WEEKLY RENT 2023/24(Q3)199.75202.12208.10Source:Cushma
101、n&Wakefield Student Accommodation Tracker 2023/24/direct-let beds onlyDynamic pricing from some major operators means that some individual rents within schemes can increase throughout the cycle by up to 70%.Overall,however,only just over 10%of beds are impacted by dynamic pricing,with two-thirds of
102、price changes throughout the cycle restricted to premium quality rooms.The most significant changes to rents have been seen later in the cycle where only a handful of rooms are available.Southampton saw rents increase by 10%throughout the letting cycle,the most of any large market.As with previous y
103、ears,there is clear evidence of the strongest increases in rents being seen in markets characterised by Cushman&Wakefield as the“most investable”,as providers react to better-than-expected market conditions.Source:Cushman&Wakefield Student Accommodation Tracker 2023/24THIS YEAR THE AVERAGE NEW SCHEM
104、E HAS 1.3M2 PER BED OF AMENITY SPACE WITH AN EVER-INCREASING PROPORTION OF PREMIUM BEDS ENTERING THE MARKET EACH YEAR.AMENITY SPACES PER STUDENT IN NEW SCHEMES0.8M21.1M21.4M218/19Cushman&Wakefields analysis has highlighted that schemes with more communal space command higher rents and achieve greate
105、r levels of rental growth over time.However,as more high-end schemes enter the market,there is a potential case of saturation at certain quality levels,as previously seen in Cardiff.COMMUNAL SPACES IN NEW SCHEMES HAVE INCREASED IN SIZE BY NEARLY 50%SINCE 2018/19 19/2020/2121/2222/2323/24A BED BUT NO
106、T AT ANY PRICEWhilst the market remains structurally undersupplied with accommodation,there is clear evidence that students are not willing(or able)to pay any price for a bed.Even in one of the UKs most acutely undersupplied locations(with private sector rents increasing by a fifth in the last year)
107、,there are currently eight developments with unfilled beds amongst the highest quality and best located in the city.The average cost of these eight schemes is 280 per week,with a 12%increase in rents seen between April and August 2023 alone,and a total increase of 40%over the last year.Nationally,pr
108、emium developments continue to“underperform”compared to mid-market beds,although it should be recognised that the largest percentage of unfilled schemes are those of the lowest quality.NUMBER OF SCHEMESSOLD OUT12345PERCENTAGE SOLD OUTLOW QUALITY TO HIGH QUALITY0%25%50%DIRECT LET SCHEMES0300600Source
109、:Cushman&Wakefield Student Accommodation Tracker 2023/24ROOM QUALITY38UK STUDENT ACCOMMODATION REPORT37CUSHMAN&WAKEFIELDSTUDENT HOUSING SHORTAGES HAVE GARNERED A LOT OF PRESS ATTENTION IN 2023.However,also of huge importance is the cost of living crisis.According to the Office for National Statistic
110、s(ONS),over 75%of students are concerned rising costs may affect their academic outcomes.AFFORDABILITY04.THE STUDENT MAINTENANCE LOANCurrently around 20 billion is loaned to 1.5 million students in England each year.The value of outstanding loans at the end of March 2023 reached 206 billion,with the
111、 Government forecasting this will rise to around 460 billion(2021-22 prices)by the mid-2040s.Importantly,these cuts in Maintenance Loan support will affect students not only this year but for many years to come.There is currently no mechanism in place to undo past forecasting when the adjustment in
112、entitlements for the following year is determined.This means that unless the policy changes,any cuts will stay in place.THE SYSTEM IS SLIGHTLY DIFFERENT FOR STUDENTS FROM SCOTLAND AND WALES,WITH BURSARIES AND DIFFERENT MAINTENANCE LOAN THRESHOLDS AVAILABLE.Maintenance loan entitlements are adjusted
113、each year in line with a forecast for one measure of inflation-the Retail Price Index excluding housing costs(RPIX).In general,this should ensure that the value of entitlements is maintained over time.However,inflation has turned out much higher than official forecasts in recent years,meaning that t
114、he support students receive has been substantially cut in real terms.The Institute for Fiscal Studies(IFS)estimates that the value of loans has fallen by nearly 10%over the past two years.To put this in perspective,a student who is entitled to the maximum level of support and living outside of Londo
115、n received around 1,000 less in real terms in the 2022/23 academic year than the same student would have received in the 2020/21 academic year.It is likely that this is causing significant financial hardship for many students.THE FALLING REAL TERMS VALUE OF THE LOANStudents are entitled to the maxim
116、um level of support if their parents earn below a certain threshold(the lower parental earnings threshold).ABOVE THAT THRESHOLD,SUPPORT IS TAPERED AWAY,WITH STUDENTS LOSING AROUND 14P FOR EVERY ADDITIONAL 1 OF PARENTAL EARNING.Students whose parents earn above a higher threshold are entitled to the
117、minimum level of support.This system of means-testing assumes that parents earning above the lower earnings threshold will contribute to students living costs.However,the lower parental earnings threshold has been frozen at 25,000 since 2008,despite significant growth in nominal earnings across the
118、UK economy since then.If the lower threshold had been updated since 2008,we would expect this level to stand at around 36,500(46%higher)for the 2023/24 academic year.This means fewer students now quality for the maximum level of support and many more qualify for less support than they would have don
119、e in previous years,even if their parents/households are no better off.41CUSHMAN&WAKEFIELD42UK STUDENT ACCOMMODATION REPORTTHE PICTURE FOR THE CLASS OF 2023While the Department for Education was quick to frame this announcement as a Cost of living boost for students,persistent high inflation means t
120、his increase will be a further real-terms cut,doing nothing to reverse the substantial real-terms cut to support over the previous two years.For the 2023/24 academic year the maximum student maintenance loan available for students studying outside of London is 9,978 p.a.,For students studying in Lon
121、don,the maximum amount is 13,022 p.a.However,the average student maintenance loan amount sits significantly below this level for the 2023/24 academic year.IN JANUARY 2023,THE GOVERNMENT ANNOUNCED A 2.8%INCREASE IN MAINTENANCE LOAN ENTITLEMENTS FOR THE 2023/24 ACADEMIC YEAR.THIS BORE NO RELATIONSHIP
122、TO RENT INCREASES OF 8%.IN LINE WITH THE POLICY OF BASING INCREASES ON RPIX.SCOTLAND,WALES&NORTHERN IRELANDAs stated,devolved areas of the UK have access to a different maintenance loan and bursary system than those studying in England.THE SCOTTISH SYSTEM PROVIDES STUDENTS(YOUNG OR INDEPENDENT)BETWE
123、EN 6,000 AND 9,000 IN THE FORM OF A COMBINED MAINTENANCE LOAN AND BURSARY,BASED ON THEIR HOUSEHOLD INCOME.Cushman&Wakefields analysis shows that the average Scottish student will receive around 28%more than an English student in 2023/24.Cushman&Wakefield analysis shows the average Northern Irish stu
124、dent,living away from home and outside of London,will receive around 16%more in loans and grants than an English student.The maintenance loan package available to Welsh students can be considered the most generous.This will mean that the average Welsh student can claim just over 100%more in maintena
125、nce grants and loans than an English student.THE NORTHERN IRELAND ASSEMBLY HAS INCREASED THE MAXIMUM STUDENT MAINTENANCE LOAN AMOUNT BY 40%IN 2023,TO 6,776 FOR THOSE LIVING OUTSIDE OF LONDON.THE WELSH GOVERNMENT HAS COMMITTED TO INCREASING STUDENT MAINTENANCE SUPPORT BY 9.4%FOR THE 2023/24 ACADEMIC
126、YEAR.43CUSHMAN&WAKEFIELD44UK STUDENT ACCOMMODATION REPORTABERDEEN85.0%75.0%99.0%EDINBURGH37.0%3.0%55.0%CARDIFF96.0%92.0%100%BELFAST55.0%5.0%76.0%LEEDS13.7%3.9%23.0%YORK6.9%0.0%8.7%MANCHESTER14.1%4.1%22.4%KEYOVERALLDIRECT-LETUNIVERSITYCOVENTRY23.5%23.2%24.2%GLASGOW39.0%8.0%68%LIVERPOOL29.3%28.6%30.5%
127、NOTTINGHAM9.4%4.2%14.4%BIRMINGHAM9.3%5.6%14.1%EXETER6.2%0.0%11.5%SOUTHAMPTON27.1%21.8%32.3%BRIGHTON5.9%0.0%8.2%READING0.0%0.0%0.0%NEW CASTLE35.3%22.7%54.0%DURHAM0.0%0.0%0.0%SHEFFIELD33.6%32.8%35.1%LEICESTER30.4%24.0%47.5%LONDON17.0%3.0%29.0%The Cushman&Wakefield Student Accommodation Tracker found t
128、he UK average annual rent for purpose-built student accommodation to be 8,353.06 for the 2023/24 academic year(7,632.55 outside of London),an increase of over 9%.The map on the right provides an overview of the affordability of PBSA across several cities in the UK,comparing average rents to the aver
129、age Maintenance Loan amount in the respective nations.Cushman&Wakefields analysis has revealed varying degrees of affordability across cities,with Cardiff emerging as the most affordable in terms of the percentage of bed spaces priced below the average loan amount for the 2023/24 academic year(takin
130、g into account the different loan and bursary systems across the four nations).At the other end of the spectrum,cities such as London,Durham and Reading offer minimal to no availability of bed spaces within the specified affordability range.ACCOMMODATION THE BIGGEST STUDENT COSTTHE AVERAGE STUDENTS
131、LARGEST MONTHLY EXPENSE IS RENT,ACCOUNTING FOR ABOUT 45%OF MONTHLY LIVING EXPENSES.PERCENTAGE OF BEDS UNDER AVERAGE STUDENT MAINTENANCE LOANSource:Cushman&Wakefield Student Accommodation Tracker 2023/2445CUSHMAN&WAKEFIELD46UK STUDENT ACCOMMODATION REPORTIMPLICATIONS FOR INVESTORSCUSHMAN&WAKEFIELDS A
132、NALYSIS SHOWS THAT FOR A NEW BUILD ASSETS VIABILITY,POSITIVE RESIDUALS REQUIRE CLUSTER ENSUITES TO BE REACHING AROUND 170PW AND STUDIOS MORE THAN 200PW NOT EVERY MARKET CAN SUPPORT THESE RENTS,AS NATURAL RENTAL CEILINGS EXIST AND VARIABLE MARKET CAP RATES ALSO IMPACT THE VIABILITY.By carefully integ
133、rating the provisions for affordability in student accommodation,investors not only fortify their financial portfolios but also contribute proactively to a more inclusive educational landscape.Considering the possibility of optimising on-site amenities also contributes to affordability.Investors rec
134、ognise that certain amenities such as cinema rooms might not be essential or heavily used by students.By revaluating the need for such amenities and focusing on those that truly enhance the student experience,investors can lower build costs,create more living spaces,and facilitate the provision of m
135、ore affordable beds on site.This can be more location based as question marks are raised when a development has a proposed gym on site when there is a national gym operator(or campus gym)in close proximity.From an affordability perspective,investors need to think beyond their own footprint and consi
136、der negotiating deals which give residents discounts at these facilities or amenities,which will negate the need for one within the new build.First-generation student beds play a significant role in offering more affordable beds through effective management and upkeep.These beds,managed with a keen
137、focus on affordability,can provide students with essential housing options that cater to their budget constraints.Additionally,collaboration with universities to establish referral schemes or lease agreements can make the product more investable and sustainable.Cushman&Wakefield has worked successfu
138、lly in recent sales comprising over 1,500 beds including deals in Coventry,Leeds,and Brighton.The development pipeline in the UK student housing sector is significantly impacted by affordability considerations.Investors who integrate affordability concerns into their investment strategies contribute
139、 to a more balanced pipeline.This approach not only caters to current student needs but also aligns with long-term demand.However,a lack of affordability focus might lead to an oversaturation of high-end developments,overlooking the demand for more affordable options.IT IS CLEAR THAT THE GOVERNMENT
140、IS COMMITTED TO PROMOTING THE BENEFITS OF NON-DEGREE QUALIFICATIONS IN LINE WITH WIDER INDUSTRIAL STRATEGY AND EMPLOYER DEMAND,WHILST AT THE SAME TIME ENSURING POSITIVE OUTCOMES FOR THOSE STUDYING AT DEGREE LEVEL.However,at this stage,it is still unclear how these outcomes will be measured and we aw
141、ait the findings of the OfS.Given concerns over social mobility and groups including Universities UK arguing interventions should be targeted and proportionate,it is likely at this stage that measures will encourage behavioural change rather than widespread intervention(especially given the wider pe
142、rceived social benefits of some courses that may not lead to significant levels of graduate earnings).However,these changes,combined with amendments to dependent visas,mean that a number of institutions may experience additional difficulties in student recruitment over the coming years especially as
143、 the number of higher apprenticeships finally starts to grow to around 100,000.THE POLITICAL ENVIRONMENTRecent years have seen UK universities enjoy the benefits of Government policy in relation to Higher Education,including the“Graduate Route”or post-study work visa,which was introduced in 2020/21.
144、The route follows on from the abolition of Student Number Controls(SNCs)in 2015/16,with these policies and a growing appetite for,and entry rate to,Higher Education,leading to the unprecedented growth outlined in this Report.However,2022/23 has seen the introduction of policy statements and reform w
145、hich could impact future student numbers,particularly at some institutions.THE POLICY HAS HELPED THE GOVERNMENT ACHIEVE ITS TARGET OF 600,000 INTERNATIONAL STUDENTS STUDYING IN THE UK 10 YEARS EARLIER THAN PLANNED.47CUSHMAN&WAKEFIELD48UK STUDENT ACCOMMODATION REPORTFirstly,in May 2023,in response to
146、 pressures relating to net immigration,the UK Government announced changes to the student visa system and from January 2024,international students studying at postgraduate taught(PGT)level will no longer be able to bring family members to the UK during their course of study(as well as restricting th
147、e ability of these students to switch to a work visa until their studies are completed).Whereas,19,139 people were accepted into the UK on a student dependent visa in 2019,by 2022,this had risen to 135,788,with the Graduate Route allowing universities,particularly post-1992s,to grow postgraduate num
148、bers significantly.Since 2016/17,those aged 25-29 and 30 and over have grown by 78.3%and 84.2%respectively at post 1992s,compared to 20.9%and 23.7%at Russell Group universities.Over the same period,international students at post-1992s have grown by 137.9%compared to 39.2%across the Russell Group.GRO
149、WTH IN POSTGRADUATE RECRUITMENT BY MISSION GROUPSource:HESA(adapted by Cushman&Wakefield)FULL-TIME POSTGRADUATE GROWTH 16/17-21/220140%75%POST-1992RUSSELL GROUPHIGHER EDUCATION POLICY STATEMENT&REFORMThe aim is to increase the update of Level 4 and 5 courses to meet employer demand,with the student
150、finance package for Higher Technical Qualifications to be placed on a par with degrees from 2023/24.Subsequently,the Education Secretary,Gillian Keegan,was quoted stating“I think a lot of people go to university because they dont know what else to do”amid a perceived lack of knowledge of alternative
151、 routes.The Office for Students(OfS)has been issued statutory guidance by Government which“would mean that provision which does not deliver positive student outcomes may be subject to a recruitment limit”,with the outcomes expected in Autumn.OfS Condition B3 assesses student outcomes on the followin
152、g basis:What are the implications of these investigations for UK institutions and future recruitment of students?Degree continuation rates are generally high,with students focused on achieving degrees that deliver positive career outcomes.Currently,only two providers are at risk due to high non-cont
153、inuation rates,with 97.5%of students at Russell Group institutions continuing with study after their first year.IN JULY 2023,THE GOVERNMENT ANNOUNCED ITS LONG-AWAITED RESPONSE TO THE POST-18 REVIEW OF EDUCATION&FUNDING,WITH THE STATEMENT AIMING TO BREAK THE“UNQUESTIONABLE BELIEF BETWEEN GOING TO UNI
154、VERSITY AND SOCIAL MOBILITY”AMID FINDINGS THAT“TOO MANY STUDENTS WERE RECRUITED ONTO COURSES WHICH OFFERED POOR OUTCOMES”.First year continuation(80%)Progression to professional employment(or further education)15 months after graduationCompletion rates(75%)THE SURGE IN POSTGRADUATE STUDENT NUMBERS H
155、AS RESULTED IN AN OLDER STUDENT POPULATION,ESPECIALLY AT POST-1992 INSTITUTIONS.49CUSHMAN&WAKEFIELD50UK STUDENT ACCOMMODATION REPORTPOST-GRADUATION EARNINGS CONTINUATION RATES BY BROAD UNIVERSITY GROUPING Over nine in 10 Russell Group graduates in employment after graduation are earning over the cur
156、rent student loan repayment threshold,compared to eight in 10 of those at non-former polytechnic post-1992 institutions.NATIONALLY,25 INSTITUTIONS HAVE 25%OR MORE OF EMPLOYED GRADUATES EARNING UNDER THE LOAN REPAYMENT THRESHOLD.Over half of these institutions are arts-focused,although it can be argu
157、ed that those pursuing careers in these subject areas are not necessarily seeking financial returns and are making a cultural contribution more widely.It would therefore appear difficult for a blanket assessment to be made on this basis.The Government is also asking the OfS to consider earnings data
158、 which falls outside of Condition B3,with potential implications for some providers.The chart below shows the difference in earnings 15 months after graduation by broad university group.Source:HESA(adapated by Cushman&Wakefield)Source:HESA(adapated by Cushman&Wakefield)%OF STUDENTS100%50%0%CONTINUIN
159、G STUDENTSSTUDENTS TRANSFERRED TO OTHER PROVIDERNO LONGER IN HIGHER EDUCATION21,000-30,0001.2x Interest Coverage Ratio(“ICR”).For development financing,senior lenders are at max.60%LTC with a particular focus on structuring loan sizing to c.50%LTGDV and a stabilised ICR of 1.2x.Debt funds can stretc
160、h leverage up to 75%of cost and provide more flexibility in the funding structure,borrowers pushing for an enhanced version of pari-passu funding(“debt first”)driving equity returns further rather than a minimal reduction in margin.The best quality loans are still being placed competitively by 2023
161、standards,with prime margins generally estimated 20bps tighter than in 2022 at 170bps due to fierce competition for a limited number of core lower leverage loans.Prime margins for development financing,assuming a 60%LTC,are estimated at 285bps,reflecting a significant drop compared to five years ago
162、,mainly driven by growing appetite in the sector from UK clearers and an inflow of non-bank capital in the sector as well as the increase in base rates resulting in total returns acceptable to these funders.61CUSHMAN&WAKEFIELD62UK STUDENT ACCOMMODATION REPORTUNITE UK STUDENT ACCOMMODATION FUND(USAF)
163、Secured a 400m refinancing from LGIM secured against a portfolio of 23 purpose-built student accommodation assets across the UK.Attracted a 85m facility from Investec to finance the refurbishment of five of their PBSA properties in the UK.Attracted a 250m five-year development facility from Lloyds B
164、ank,bringing in Wells Fargo and Bank ABC,as well a 75-year ground rent from Aviva,secured against 1,673 student beds and 80 residential apartments across three towers in London for University College London students.Between Greystar,Pimco,and the Public Sector Pension Investment Board.Refinancing a
165、380m loan with Aareal Bank secured against 1,747 bedrooms across a London portfolio.Secured a 114m development facility from Maslow Capital which will be used to support the redevelopment of an existing PBSA asset in London.GLOBAL STUDENT ACCOMMODATION(GSA)URBANESTUNION PROPERTY DEVELOPMENTM A R C H
166、 2 0 2 3J U LY 2 0 2 3AU G U S T 2 0 2 3KEY PBSA FINANCE DEALS 20232002420202025202272.00%2.15%2.25%2.25%1.90%1.70%1.70%1.70%1.70%1.70%3.75%3.75%4.00%4.00%3.25%2.85%2.85%2.85%2.85%2.85%STABILISED 50%LTVDEVELOPMENT 60%LTVUK-PBSA FINANCING PRIME MARGINSCHAPTER JOINT VENTURE63CUSH
167、MAN&WAKEFIELDUK STUDENT ACCOMMODATION REPORT64RATE(IN%)--JAN-181-JAN-191-JAN-201-JAN-211-JAN-22 1-JAN-231-JAN-24 1-JAN-25 1-JAN-261-JAN-27 1-JAN-28CHART 1:Since 2018,prime margins today pricec.30bps tighter,following a mild increase in2020-2021 due to Covid.Over the same periodhowever,bas
168、e rates(5 Yr Sonia)have soared fromc.1%to 4.75%-combined resulting in a 2.3x higherall-rate at the lowest point(Aug-20)vs today(Sept-23).5 YR SONIASTABILISED 50%LTCRATE(IN%)--JAN-181-JAN-191-JAN-201-JAN-211-JAN-22 1-JAN-231-JAN-24 1-JAN-25 1-JAN-261-JAN-27 1-JAN-28CHART 2:The rise in base
169、 rates hasseen the margin diminishing as a portion of theall-in rate.This has increasingly led borrowersto focus more on the funding structure(equityfirst vs pari-passu vs back-ended equity)as adriver of equity returns rather than lender margin.5 YR SONIADEVELOPMENT 60%LTCSince 2018,prime margins to
170、day price c.30bps tighter,following a mild increase in 2020-2021 due to COVID-19.This has increasingly led borrowers to focus more on the funding structure(equity first vs pari-passu vs back-ended equity)as a driver of equity returns rather than lender margin.OVER THE SAME PERIOD HOWEVER,BASE RATES(
171、5 YR SONIA)HAVE SOARED FROM C.1%TO 4.75%-COMBINED RESULTING IN A 2.3X HIGHER ALL-RATE AT THE LOWEST POINT(AUG-20)VS TODAY(SEPT-23).THE RISE IN BASE RATES HAS SEEN THE MARGIN DIMINISHING AS A PORTION OF THE ALL-IN RATE.65CUSHMAN&WAKEFIELD66UK STUDENT ACCOMMODATION REPORTRECENT REGULATORY CHANGES SUCH
172、 AS THE BUILDING SAFETY ACT,FIRE SAFETY ACT 2021&EWS1,WILL HAVE AN IMPACT ON THE STUDENT ACCOMMODATION SECTOR.THIS SECTION TAKES A CLOSER LOOK AT WHAT THIS MEANS FOR THE SECTOR.KEY CHANGES TO LEGISLATION 06.FIRE SAFETY ACT 2021&EWS1BUILDING REGULATIONS APPLYING TO NEW RESIDENTIAL BUILDINGSA NEW REQU
173、IREMENT FOR FLOOR IDENTIFICATION AND FLAT INDICATION SIGNAGE WITHIN BLOCKS OF FLATS WITH STOREYS OVER 11M.WAYFINDING SIGNAGE FOR THE FIRE SERVICE A REDUCTION IN THE TRIGGER HEIGHT FROM 30M TO 11M.SPRINKLERS OF COMBUSTIBLE MATERIALS IN AND ON THE EXTERNAL WALLS OF RESIDENTIAL BUILDINGS OVER 11M.COMPL
174、ETE BAN This will often be onerous,involving opening up the cladding to identify the materials used.It is expected that in the next few years,the External Wall System 1 form(EWS1)that many lenders have required will be replaced by FRAEWs,which will provide the comfort required that the building is s
175、afe.A FIRE RISK APPRAISAL OF EXTERNAL WALL(FRAEW),ALSO KNOWN AS A PAS 9980 REPORT,IS REQUIRED AS PART OF A BUILDINGS FIRE RISK ASSESSMENT.BUILDING SAFETY ACTThis Act introduces the most far-reaching changes.From October 2023,additional requirements for buildings over seven storeys or 18 metres high(
176、defined as high risk)will come into force.As well as registering the buildings with the Regulator,these include:THE GATEWAY PROCESS Introduces three new hurdles that must be taken into account when programming construction timescales as approval will be required before construction can start and upo
177、n completion.This could add several months.THE GOLDEN THREADRequires key information regarding the construction of the building to be logged in a database.THE SAFETY CASERequires building owners to produce a document to identify and manage risks specific to the building to prevent fire and structura
178、l failure.The collective cost to the property industry of implementing this legislation was estimated at up to 2.91bn over 15 years,according to analysis produced by the Department of Levelling up,Housing and Communities(DLUHC)in August 2023,adding significant cost at a time when construction inflat
179、ion is already running at higher levels than seen for many years.Since the Grenfell Tower fire in June 2017,the legislative framework controlling the safety of tall residential buildings over 11 metres,including student accommodation,has slowly been transformed.SIX YEARS ON WE ARE CLOSE TO SEEING TH
180、E FINAL ANTICIPATED CHANGES COME INTO FORCE.KEY CHANGES IN LEGISLATIONAdditionally,in July 2023 Michael Gove,Secretary of State at DLUHC,stated an intention to mandate second staircases in new residential buildings above 18 metres.This is already a requirement in London for buildings over 30 metres.
181、CUSHMAN&WAKEFIELDUK STUDENT ACCOMMODATION REPORT6970CONTACTSANDREW T SMITHHead of Student Accommodation,UK T+44(0)787 663 JAMES WOOLLEYPartnerT+44(0)207 152 JAGRUTI JOSHIPartnerT+44(0)207 152 VICTORIA STEVENSONPartnerT+44(0)161 235 CHARLIE ARMOURAssociateT+44(0)792 076 LAUREN MILLSSenior SurveyorT+4
182、4(0)207 152 KEVIN LEESurveyorT+44(0)20 7152 CRAIG RIGBYAssociateT+44(0)750 055 RUSSELL HEFFERANPartnerT+44(0)161 235 OLAN COYLEAssociateT+44(0)161 235 EDMUND HENDRYAssociateT+44(0)207 152 HARRIET BANTOCKAssociateT+44(0)207 152 WILL WESTLEYSenior SurveyorT+44(0)161 235 INVESTMENTDAVID FEENEYPartnerT+
183、44(0)797 961 JOSEPH LINNEYAssociate T+44(0)161 455 RICHARD TOWNSENDSenior ConsultantT+44(0)161 235 PAULA CHRISTOUSenior ConsultantT+44(0)161 455 JEN HARDMANAssistant Consultant T+44(0)161 235 CONSULTANCYVALUATION&ADVISORYMATT STILL PartnerT+44 787 625 MAX BORCHERT AssociateT+31 620 489 SARAH JONESPa
184、rtnerT+44(0)790 518 ANDREW TC SMITHInternational PartnerT+44(0)113 233 MATTHEW CLIFFPartnerT+44(0)113 233 GEORGIA SEYMOURGraduate SurveyorT+44 113 233 UNIVERSITIES&PROCUREMENTBUILDING SURVEYING DEBTDAVID GINGELLInternational PartnerT+44 203 296 HARRY NICHOLAS Apprentice SurveyorT+44 771 733 71CUSHMA
185、N&WAKEFIELDUK STUDENT ACCOMMODATION REPORT72ABOUT CUSHMAN&WAKEFIELDCushman&Wakefield(NYSE:CWK)is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries.In 2022,the firm reported revenue
186、 of$10.1 billion across its core services of property,facilities and project management,leasing,capital markets,and valuation and other services.It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity,Equity and Inclusion(DEI),Environmental,Social and Governance(ESG)and more.For additional information,visit .2023UK STUDENT ACCOMMODATION REPORT