How to deliver affordable, inclusive accommodation amidst rising living costs
At Bisnow’s recent UK Student Housing Roundup, Yardi’s Justin Harley joined industry experts from Greystar, Hines, HYBR, The Student Hotel and Host to discuss how we can begin reimagining the student experience.
Despite being one of the stand-out success sectors of late, with demand for new accommodation consistently outstripping supply, the cost-of-living crisis will inevitably impact the industry. The panel’s discussion explored how operators can deliver affordable yet inclusive housing amidst the rising living costs.
- Maria Hatch, director of client relationships for Greystar
- Tom Rix, managing director, aparto & operations for Hines
- Hannah Chappatte, CEO of HYBR
- Ilya Tabachinskiy, head of UK development for The Student Hotel
- Seb Horst, investment director for Host
Despite recent successes within the student housing sector, Hannah Chappatte, moderator of the panel, opened the discussion by addressing the cost-of-living crisis, how businesses are managing to meet NOI (Net Operating Income) and how it may impact the sector. Tom Rix, managing director of Hines, addressed concerns over landlords who offer the all-in-rent model.
“With fixed costs, not only is the cost of living difficult for landlords but also for the students to understand how much energy they are using,” said Rix. “We anticipate facing this turmoil for the next year and frankly, there needs to be some government support around this.”
As operators in the market, the panel also stipulated the importance of accelerating their push towards Net Zero and improving assets to sustain NOI goals.
“Implementing technology solutions to facilitate the monitoring of consumption will be vital moving forward. This will empower our students to understand how much energy they are utilising and become more conscientious and aware,” said Rix.
This strategic solution has already seen success in some UK PBSA developments as Ilya Tabachinskiy, head of UK development for The Student Hotel, explains. “In our buildings, we have installed a device that displays a picture of a polar bear on ice. The more water you use in the shower, the more the ice melts around the polar bear. Since installing, our water consumption has dropped by 20%, which shows people’s consciousness towards their consumption.”
Expanding on the discussion from a technology standpoint, Justin Harley, regional director for Yardi, stressed the importance of operational efficiency for meeting NOI.
“Student operators are still running day-to-day operations with 40 different technology systems, which is not conducive to an efficient working environment. Operators must strive towards obtaining marginal gains across their business and utilise data to make better decisions on how to positively impact their operating income,” said Harley.
How have buildings and operations had to adapt to meet student requirements?
With a multitude of impacts to contend with over the recent years, student operators have had no choice but to remain flexible to meet student requirements.
As experienced operators, Rix and Hatch agreed that there has been a significant change in service-level requirements, stating the importance of human, face-to-face interactions to build a strong community.
“When looking at feedback, students no longer talk about features in their room but more about event plans and well-being programs,” said Hatch. “You can have a perfectly designed building, but unless you utilise your student data, run focus groups and have a personal touch to your brand, amenity spaces will not be utilised.”
In addition to this, Tabachinskiy added some valuable insight. “Adapting from a building perspective requires a high level of flexibility. Pay attention to how your building is used per square metre. There may be some areas that aren’t fit for purpose and you need to be able to have the flexibility to change these areas where and when needed.”
How is affordability factored into PBSA?
Speculation is rising over the affordability of PBSA, however, a recent Knight Frank study suggests that it could be the most cost-effective solution for students looking to avoid the ongoing cost-of-living crisis.
With affordability at the forefront of market concerns, the panel shared mixed views on whether affordability is factored into the PBSA sector.
“Currently, it isn’t being factored in,” said Seb Horst, investment director for Host. “The only way that long-term affordability will be factored in, particularly in London, is by enforcing it through planning. Hypothetically, if 10 parties are bidding on a site – nine want to provide affordable housing as part of their developments and the 10th doesn’t – the 10th wins the investment. Unless affordability is enforced through planning, it will not get factored in.”
Challenging this view, Tabachinskiy shared that, ‘If you enforce affordability from the top-down, the expense will inevitably be felt somewhere else, for example, land price. The same applies to rent caps – it will ultimately choke-up supply and make things more expensive either earlier or later down the line.”
The panel suggested that creating alternative, more affordable spaces would be a suitable option for factoring in the rising costs of living. Albeit smaller per square metre, the panel agreed that this would be a viable option.
What technology solutions will maximise building efficiency and productivity in PBSA?
As recently stated by technology expert Harley, striving for operational efficiency should be a primary focus for all PBSA operators given the current climate. Implementing a single, end-to-end technology solution will alleviate the pressures of time-consuming admin tasks and instead allow PBSA operators to spend time on things that matter – like students and business scalability.
“This is the goal; however, technology alone does not solve any problems,” said Harley. “The responsibility is on the boards and investors to focus on technology and putting the people in place to make it work. It’s about the process, people and technology. This combination will free-up time for operational teams to focus on face-to-face interactions and building relationships with their students.”
An end-to-end solution to bring it all together
Yardi’s end-to-end PBSA platform is designed to optimise student housing services within a single solution. It is a powerful marketing and leasing platform that automates processes and streamlines activities to improve the student experience. Our solutions are not only designed to digitalise operations but empower management teams to free up valuable time to focus on nurturing students whilst enabling companies to easily scale their business.