Perspectives 2019

The Future – Generation Alpha Generation Alpha, the children of millennials, began to come into the world in 2010 – and there are now around 2.5 million members of this new group born every week worldwide. Compared with previous generations, they are much more likely to have enjoyed international travel, social media and tech from an early age – even more so than the tech-savvy Generation Z, the first generation to live their entire lives in a digital world. How can UK real estate investors anticipate their needs and plan accordingly? Accommodation The key context is that in the near future, the biggest factor in UK student accommodation is still likely to be overseas students. Since 2000, EU students in the UK have grown by 63% and other international students by 215% – meaning that such students now make up nearly one quarter (23%) of the UK student population. With government policy set to offer two-year post-study work visas for those graduating from summer 2021, we can expect this to have a positive impact on demand, particularly as the present policy (put in place in 2012) gives students just four months to find work after graduating. The UK market for student rental is well placed to deliver on this need. Purpose-built student bed spaces have risen to a record 627,000, with 31,348 new beds this year: this represents a 2.8% growth, with 77% of all new beds delivered by private sector development. The increase in capacity is the largest ever observed by Cushman & Wakefield, and represents a boom as the oldest members of Generation Z enter university life – the largest cohort in the world with just under 2 billion people. So what should developers and investors look out for? Overseas students tend to prioritise location, facilities and quality, and super-prime regional spaces are in high demand. Schemes close to a campus also achieve stronger rental increases than those further away: for example, schemes in Liverpool within a five- minute walk of campus have achieved increases of 2.2% this year, while those more than 15 minutes away have seen falls of 0.9% on average. Comfort, connectivity and convenience are therefore likely to be the big factors in the attractiveness of accommodation for tomorrow’s students. Whilst investors in regional university towns are responding to the needs of today’s students, we should also realise that comfort, connectivity and convenience have different meanings to different people. Prop tech is already playing a big role in revolutionising UK student accommodation, and for the next generation of young adults, tech will be essential in providing the comforts they expect from accommodation. Fully automated property management apps such as Arthur Online are yielding superb results, and smart technology is increasingly capable of giving residents interactive control over every aspect of their living environment – from door locks and heating to maintenance issues and communal room bookings. With these changes in mind, developers must keep looking to the future to find their edge in an ever- more competitive market, ensure the needs of Generation Alpha are met, and continue creating great places to live. The 25-34 age group is the largest demand generator of overseas visitor nights spent in the UK CUSHMAN & WAKEFIELD 07 COVER STORY

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