Student Accommodation – Weathering the Storm
Universities closed their physical doors in mid-March and made a rapid transition to virtual teaching. Most universities have enabled students to leave accommodation contracts for the summer term, and summer business has been cancelled. A number of private accommodation operators followed suit by allowing students to request a refund of summer term rent.
Many students remain in residences, including international students unable to leave, careleavers and those affected by the virus, and work continues to ensure the safety and welfare of residents. Cushman & Wakefield data suggests that the cost to the main private sector providers offering contract releases is almost equal in size to universities, accounting for a proportion of revenue for the summer term, and resulting in short term pressure on university and investor cashflows.
Looking forward, COVID-19 makes planning difficult for the forthcoming academic year. Universities face uncertainties around recruitment, with caps on UK student intake proposed by Universities UK to restrict aggressive competition, as universities seek to backfill the partial loss of up to £7bn in international students’ fee income …