Will the PBSA sector survive the pandemic of 2020.
There are few industries, and no investment sectors (I know off) that can escape from a pandemic unscathed. There is one investment sector however, commonly known as the PBSA market (purpose-built student accommodation) that has been notably called-out as robust & counter cyclical in times of economic downturn.
Notwithstanding the certain short-term effects of the pandemic, it’s fair to say if we looked at a list of sectors that are panicking right now, PBSA would not be on it.
Investors will continue to buy PBSA, pandemic or no pandemic
Investors will continue to look at UK PBSA for its secure long-term income, regardless of any short-term unintended consequences caused by the coronavirus pandemic, the broad reason is, domestic and international students will continue to look at UK higher education as one of the top places in the world to study.
Moreover, what may have been a predicament for many 18-year-old UK students in Summer 2020 – university verses seeking full-time employment – has become less of a quandary for many, as there is now no other option.
Higher Education sector is feeling the burden more than the PBSA sector
Many UK universities – like so many suffering industries – have a financial dilemma as we head towards an inevitable recession and uncertainty of when normality will regain.
International student numbers would have been anticipated extremely optimistically by each university for 2020/21. What an international student brings per placement is a higher course revenue than that of a domestic student.
With travel restrictions still in place, and likely to be for some time, the uncertainty over the academic year start date – September 2020 might be delayed till January 2021 – and while universities frantically fathom out how they will deliver teaching, it’s all rather up in the air.
However, a £2bm government bailout has been ask for, as these optimistic overseas student numbers, financial reality and escalating debt has caught up with many higher education institutions.
PBSA opportunity for the domestic students
This does however present an opportunity for the domestic and 18-year-old UK student.
This is where PBSA and the higher education sector will focus their efforts.
Given the declining job market and an estimated unemployment rate that is already being compared to the Great Depression. Domestic and 18-year-old UK students will be absolutely key for the 2020/21 academic year. The PBSA sector, as does the higher education sector, have a very positive outlook on these groups with a sudden surge of applications expected in the summer.