C&W Perspectives

rooms, in favour of larger communal areas. This is reflected in modern building techniques as more and more developers seek to integrate modular building methods aimed at cutting costs and creating uniformity, particularly in large-scale developments. Alternative room types such as townhouses have also entered the market in line with developers diversifying their product in the increasingly competitive marketplace. Smart technology has not only become integrated into living trends of students, but also within the construction itself. A number of recently opened premium schemes have begun to integrate smart home technologies into their offering, including the introduction of mobile technology for students to enter their room, as well as smart TVs, gaming rooms and cinemas within the building. This is only likely to become more commonplace as technology continues to develop and becomes more affordable. We are also seeing providers taking on more sustainable approaches to their developments as students focus more on environmental sustainability. Innovative trends can be found in recently opened schemes, where rooms are designed with renewable furniture alongside a shift towards energy efficient systems. Some of the UK’s largest providers are also making advanced upgrades to their existing buildings in an effort to reduce carbon emissions. The future of PBSA is now firmly headed towards smart and sustainable developments. Looking forward, PBSA providers such as IQ and Fusion are becoming more focused on the co-living model, seeking to extend the life cycle of their tenants as they leave university. Target locations are strong with university and financial centres offering a good level of graduate jobs. Similar to PBSA, this model is on an all-inclusive basis with shared amenities for young professionals. With schemes already planned in Manchester and Sheffield we expect this diverse and strategic model being rolled out throughout major cities in the UK over the coming years and it is also being adopted in the hotel sector. From January to end of October there were approximately £2.1bn of PBSA deals transacted. UCAS data shows that there are now clear divisions in the market, with applications to higher tariff universities growing by 1%, whilst lower tariff institutions have fallen by 6% (largely mirroring last year). These divisions are also reflected in applications by subject area. Portfolios represent 55% of transactions between January and October. There is currently £0.87bn under offer. Cushman & Wakefield is currently anticipating average rental growth of 2.9% between 2017/18 and 2018/19. According to UCAS, overall acceptances for places at university were slightly down for 2018/19, with UK students places falling by 1.9% despite a near 3% fall in the number of UK 18 year olds. EU students places have risen by 3%, whilst non-EU internationals are up by 4%. 2.1bn 55% £0.9bn 2.09% 6% 1.9% Overall demand for accommodation remains strong, with an increasing number of students demanding a purpose-built bed space CUSHMAN & WAKEFIELD 15 ALTERNATIVES