The demand for student accommodation continues to grow in the UK. In 2017/18, there were 602,000 purpose-built bed spaces available to students; 87% of these were delivered by the private sector.
Critically for investors, the value of transactions is greater than ever, in spite of fears that the market had peaked and concerns over the impact of Brexit. Despite this market buoyancy, clearly risks must be appropriately managed and investment decisions taken carefully. For us and many others, researching, analysing and integrating environmental, social and governance (ESG) issues is a critical element of such risk management. Investments involving student accommodation intersect with a broad range of ESG issues that may of themselves, or in combination, have potential to materially impact on overall profitability. One ESG focus is that of health and wellbeing, an area of growing importance to both active investors and student occupiers.
For us and many others, researching, analysing and integrating environmental, social and governance (ESG) issues is a critical element of such risk management.
When planning for student accommodation, consideration should be given to the connections between the built environment, both physically and mentally. For example, in terms of nutrition, fitness, mood, sleep patterns and performance. Aspects include:
- Lighting: Ensuring availability of sufficient natural light and windows. Mood is significantly affected by access to natural light, and by the type of artificial light we are exposed to. Lighting has a big effect on alertness and concentration and traditional lighting can disrupt the body’s circadian rhythm (associated with chronic diseases including obesity, diabetes, and depression).
- Bed quality and comfort: Sleep and mental health have a bidirectional relationship; investing in mattresses that improve sleep quality can contribute to improved wellbeing.
- Curtains: Related to the above, ensuring that light pollution does not prevent sleep is important.
- Sound-proofing: Noise has been found to influence occupants’ mental health. Each asset must at least meet relevant regulatory standards (and preferabley surpass) to minimise the impact of noise.
- Temperature: Respondents to NUS’ Homes Fit for Study survey in 2014 described being mentally affected by the temperature in their accommodation. Whilst good provision of heating is important, issues such as pre-set thermostats could result in heat stress which itself has a negative impact on mental health. Heating can also affect occupants’ physical activity which in turn can impact on mental health. Reducing drafts can also help.
- Air quality and ventilation: Being damp free and simple improvements like plants to help with better air ventilation should be considered.
- Green space: Views and access to nature have been connected to better wellbeing.
- Safety and security: Implement 24/7 management strategies and promotion of safety precautions to students (refreshed for each new student intake). Consider early (i.e. during design).
- Physical Exercise: Consideration to provision of gym facilities, indoors or outdoors. Establishing relationships with local sports facilities to enable subsidised membership.
- Nutrition: High quality kitchen facilities with appropriate cleaning strategy in place. Healthy food options, preferably with pricing and/or other choice incentives. Students should also be able to easily access good quality drinking water.
- Accessibility: All residences should aim to be within feasible walking distance of suitable public transport or educational establishment. Adequate and well-maintained cycle storage facilities (secure, well-lit with overhead cover) should also be provided as standard.
Additionally, property managers need to cooperate with the university’s welfare services to maximise the support that can be provided for students to reach their optimum mental wellbeing. Mental health training should be provided for all student-facing staff, so they are equipped to follow the right protocols, respond adequately to distress, understand the boundaries of confidentiality, and consider the positive things they can do to create a supportive culture, including signposting students to further support and community care.
Student accommodation not only provides shelter, but should also offer a rich environment of inclusiveness, generosity of spirit, respect and excellence in which students are enabled to become the best people they can be.
Integrating with existing local communities and/or supporting creation of new communities within and around student accommodation is crucial, particularly as it helps first year students transition into their new lifestyles. Student accommodation not only provides shelter, but should also offer a rich environment of inclusiveness, generosity of spirit, respect and excellence in which students are enabled to become the best people they can be. Students deserve an excellent residential experience where they feel a sense of belonging and engagement to facilitate true academic success. Property managers should support social measures and pastoral care. Design and fit-out of accommodation can enhance community spirit, by providing comfort and high quality social space. An allocation system should be employed to allow new students to choose their room in the accommodation and provide a matching service to live with a preferential mix of others, that relates to gender, nationality and stage of study.
Attention to considerations such as these can reduce project risks, build social support and generate incremental value.
EVORA can provide comprehensive end-to-end sustainability consultancy support for investors in and operators of student accommodation, including:
- Development of ESG policies and strategies;
- Certification (e.g. WELL Standard and Fitwel); and,
- Reporting (e.g. Corporate Social Responsibility (CSR) reports, Responsible Property Investment Statements and / or disclosure of sustainability performance within Annual Reports).
Contact us to speak to a member of the team.
Cushman & Wakefield, UK Student Accommodation Report, 2018