Student accommodationwhat is the future for students

in London?

Allan Hilton

Chief Executive

Cass and Claredale Halls Of Residence Ass Ltd

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Cass and Claredale Halls of Residence

•A small charitable Housing Association – turnover £2.2m, 10 fulltime staff, 37part time staff

•Providing affordable accommodation to 377 university students in London

•Location – East London: Hackney and Bethnal Green

•Students from London Met, Queen Mary, City University, LSE, University of the Arts, UCL and others

• 2011/12 - 2600 applications

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Claredale House

Sir John Cass HallSir John Cass

• Hostel style, large common room, communal showers, kitchens, garden. great community 131 rooms

• Rents £115 per week, 39 week contract. Inclusive of internet, insurance and utilities

Claredale House

• 4/5/6 person cluster flats, with shower room and toilet, 246 rooms

• Newly refurbished at a cost of £7.5m

• Rents £125 per week for average room, 39 week contract. Inclusive of internet, insurance and utilities

• Occupancy during term time 99%+ summer 2011= 92% mostly filled with interns from banks

Supply and demand

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• 272,000 students in London, 40 Universities (DJD)

• 150,000 students from outside the capital, including 50,000 outside the UK (source DTZ)

• 57,000 Halls rooms available in University and Private Halls (source CBRE)

• Headroom 90,000 shortfall (source CBRE)

• International represent 20% in London 14% in the rest of UK

• 10,000 rooms in the pipeline over the next 2 years

• Result mismatch between supply and demand, which means private sector can charge premium prices

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Source DTZ London Student Accommodation database 2011/12

Type of Accommodation in London

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Source DTZ student Accommodation Database 2011/12

Who provides Accommodation in London

London accommodation costs

• University Halls - median price £119 per week, median annual rent £4549 (source DTZ)

• Private Halls – median price £195 per week, median annual rent £8,849 (source DTZ)

• Private Halls mostly 50 week contract - University mostly 39 weeks

• Unite nearly 7000 rooms in London customers are 70% international (source Unite annual report 2010/11)

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8Nido King’s Cross (£175-£325 p/w) IQ Hoxton (£199-275 p/w)

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Unite Canto Court Old street (£299 p/w) Urbanest Hoxton (£220 - £345 p/w)

Sell off Accommodation?

• London Metropolitan and City University sold accommodation

• Prices pre sell off matching University average – 38 week contracts

• London Met – sold accommodation to Opal

- Opal, Tufnell Pk En-suite £196 per week 51 week £9996 pa

- Opal, Arcade non En-suite £173per week 51week £8823 pa

• City Uni – sold accommodation to Liberty Living

- Liberty Court En-suite £170 per week 42 week £7140

- Liberty Hall Ensuite £170 per week 42 weeks £7140• • Would you want your son or daughter to pay these prices?

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Sell off Accommodation?

• City University application to Cass and Claredale pre sell off 6% post sell off 14%• London Met Students tell me regularly that they will not come to London without

room at Cass and Claredale • Is offering Student Accommodation part of the core product? Is it not about bums on

seats not bums in beds? • Are Halls part of University experience! S.U. • University Finance officers looking for capital receipts on accommodation – family

silver• Greater capital receipts means higher rents to students• University short of funds to invest in new Accommodation and wants it off balance

sheet. • Who can afford hall fees of £7000+ only those from higher income families and

overseas

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Culture – how we do business

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Culture – how we do business

• Opal will not issue keys until deposit and first term rent paid – cherry picking rich students, if you are waiting on loan forget it.

• Liberty insist on parental guarantee or full yearly payment

• Overseas student underwritten by City University

• Unite will not accept packages for student at reception – too time consuming

• All charge extra for monthly payments, many add on fees

• Leaving University- still liable for rent until room filled

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Culture - How we do bussines

• Private sector good 24/7 security

• No subwardens/RA or onsite living staff

• Little pastoral care, there is not money in it! Nido is an exception

• No attempt to create community in terms of design of building or staff input - soulless buildings

• Studio great ! How do you make friends?

• First years need community – take all the doors off!

• Events – Welcome, boat party, xmas dinner, Bonfire Night

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Why Ensuite

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• All new accommodation last 10 years in London En-suite mostly zone 1 and 2

• Banks are comfortable with the model and willing to fund it

• Build costs for En-suite cluster not much more than for standard rooms in clusters due to HMO regs.

• Refurbishments of existing liable for VAT, new build VAT zero

• Able to charge a premium

• Planning environment – Land very expensive so need premium product

• It is what Universities have wanted for international students and prestige ? Is it what students want?

• Private sector not willing to take a risk on alternative model

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• Private sector will keep delivering high end accommodation it does not know how to do anything differently, neither do banks know how to fund something different

• Planning pipeline 9,700 rooms next 3 years all high end (souceCBRE)

• Some London Universities will sell off accommodation

• Local authorities getting upset - Planning rules will change and restrict high end accommodation, without university backing

• Islington/Tower Hamlet - affordable residential

Looking forward

Looking Forward

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• Universities have opportunity to shape type of accommodation and communities

• Universities should take a long view, investing in student accommodation is profitable, why else would the private sector do it. Universities are also better at managing them

• What is wrong with hostel style accommodation for first years, affordable, sociable. Able to make friends

• En-suite build costs £50K - £60K, Hostel style £35K

• Deliver for £135 per week

• Affordability!!

Student accommodationwhat is the future for students

in London?

Allan Hilton

Chief Executive

Cass and Claredale Halls Of Residence Ass Ltdallan.hilton@cassandclaredale.co.uk

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