Successful property strategies are all about understanding customer needs and delivering best-in-class services that reflect those needs.
Property has become a service. In purpose-built student accommodation (PBSA), students don’t pay rent to live in a room – they get a service, which happens to come with a clean and modern fitted bedroom, bathroom and kitchen.
At Unite Students, welfare support and round-the-clock security and safety measures are not optional extras, but part of the all-inclusive service package to make sure students are safe and secure while living with us.
This package connects them to a friendship group using our app, by creating virtual households long before students move in, helping to reduce anxiety about living with strangers when they leave home. Our students can also connect to experts who can help with mental health and wellbeing issues 24 hours a day, 365 days a year.
Since the onset of Covid-19, our service has been enhanced with additional cleaning, staff wearing Public Health England-approved PPE and hand sanitiser available at all of our properties.
PBSA is at the forefront of a move to focus on service – a journey that property investors and managers needed to go on before the pandemic and one that is now essential. Putting customers at the heart of our business and serving their needs is something Unite Students has always done and is partly why I recently left a role in retail and leisure.
It’s a long way from the world of long leases to unknown tenants with cashflows supported by upward-only rent reviews – a model property investment has been built upon.
It is likely that every property sector will have to move to a business model where landlords closely understand customers, not tenants, and provide far more than just a building governed by a long-term contractual lease.
The reward will be customer loyalty (read, ‘reoccurring sustainable cash flow’). In turn, they will become preferred space providers (read ‘rental growth’).
A desire to be customer-centric is why Unite Students invested £100m in students as the first UK PBSA provider to forgo rent following the Covid-19 outbreak in March. It was the right thing to do for our customers.
Covid-19 has clearly had an impact on the sector’s short-term performance, but the medium- and long-term outlooks remain robust, with 2020/21 UCAS figures showing a promising increase in overall applicants and a drop in the deferral rate.
Domestically, the market is under-supplied and demand is set to rise. Research by the Higher Education Policy Institute (HEPI) suggests demand for university places will surge by 50,000 domestic students by 2030 as the number of 18-year-old UK school leavers rises.
A further 300,000 places will be needed to keep pace with the growing participation rate, HEPI estimates. History also shows that demand for education always increases in times of economic distress.
In our most recent survey, 89% of students said they wanted to return to campuses as soon as it was safe to do so and stressed the importance of having a social life, while 79% said living away from home on campus was as important a part of their university experience as lectures and tutorials.
Among the top 10 safety measures students wanted were robust cleaning regimes and increased hand sanitiser provision. These and much more are integral to our offer. That’s property as a service, or what we like to call our home for success.
Polly Troughton is group investment director at Unite Students