The Class Conference 2023: Key Takeaways

November 27, 2023


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The Class Conference 2023, held in Barcelona, brought together industry experts and stakeholders in the Purpose-Built Student Accommodation sector. Themed "Reality Check," the conference delved into the complexities of student housing, exploring critical themes such as affordability, sustainability, investment, and experience. Below are the 10 key takeaways from the conference, providing valuable insights into the evolving landscape of European student housing.

1. Robust PBSA Demand: The PBSA sector has witnessed sustained demand, with a staggering €2.3 trillion poised to enter the market. This demand is further enhanced by an emphasis on sustainability and Environmental, Social, and Governance (ESG) considerations, marking a shift towards responsible investment.  

2. Diverse Investment Landscape: Reflecting the dynamic nature of the European market, countries like Spain, Italy, Germany, and France have emerged as prime investment destinations, with growing demand and increased internationalisation efforts. The increasing interest of investors in pan-European options indicates a strategic approach to portfolio diversification, highlighting the student living sector's robustness.  

The Class Conference particularly gave a highlighted look into the regions of Spain and Germany, revealing what these markets had to offer.

3. Strategic Spanish Market Insights: Spain's PBSA market is the 5th largest globally with 1.7 million students, and has undergone significant consolidation over the past 5 years, with nearly with nearly 30,000 units delivered. Unique about Spain’s student housing market is that offers a blend of less-supplied markets and a level of maturity that the capital market will understand – making it an appealing investment destination.  

Secondary cities within Spain were discussed as attractive opportunities, but it was emphasised that selecting the specific micro-locations are crucial for successful ventures.

4. German Market Dynamics: Germany's market is notable for its potential for capital appreciation and a growing international student base. Germany boasts the second-largest student population in Europe, with 2.9 million students, trailing only France and the population of international students has increased to an average of around 15% across Germany.

The greatest challenges for Germany lie in the complex and stringent regulations, especially in capital cities, that may hinder the delivery of PBSA supply

5. ESG Implementation Challenges:  

The conference showed that the integration of ESG principles into the student housing sector faces significant hurdles, including challenges in establishing comparable metrics, adopting technical solutions, and navigating who takes responsibility.

The demand for ESG reporting is becoming universal among students, investors, and developers.  

An update on the compliance environment, provided in the Sustainability Dilemma panel, stresses the importance of ambitious targets while acknowledging the difficulty of making substantial changes in the current landscape. This collective perspective underscores the need for immediate action, comprehensive reporting, and a collaborative industry approach to effectively address the challenges of integrating ESG principles in student housing.

This means that there is an observed growing trend towards upgrading existing stock to align with ESG goals.

6. Understanding Student Needs: The conference showed that it was important to recognise students as diverse learners, with different needs and preferences. The Student Living Monitor presented at the conference showed that students as a whole, suffer from poor mental health, and that non-traditional students showed even lower scores for well-being.

Affordability also became a recurring theme when discussing student wellbeing, as the Student Living Monitor showed that anxieties over financial issues caused major impacts to wellbeing. Initiatives such as scholarships and inclusive rents were suggested to support the most vulnerable students.

Overall, availability of choice, targeted and curated support for each group, proper engagement of students, and an inclusive community were the main focus areas to improve regarding student wellbeing.

7. Blended Living Realities: The Class Conference examined how living, learning, and working environments are starting to blend, and this means shaping urban realities at 3 different levels: the university, the city and the urban campus.

It called for a joint response from various stakeholders, suggesting flexible and full-service housing providers to meet diverse accommodation needs, academic institutions to adopt hybrid learning models and expand into coworking spaces or corporate campuses, and finally, government involvement in urban management systems and the regulation of international investors.

8. Affordability and Regulation Impact: Affordability is increasingly viewed as a critical risk measure, with regulatory impacts on rents shaping financial realities in the sector. The Class Foundation’s role in addressing affordability highlights the industry's commitment to finding practical solutions.

In the Netherlands and other European countries, a concerning trend emerges as students increasingly opt to stay in their family homes due to the financial strains of acquiring student housing.  

Finding the balance between affordability for students and delivering a satisfactory return on investment for investors is a nuanced challenge. The necessity of further involving the public sector in this balancing act was brought up, proposing considerations such as bursaries. This insight highlights the multifaceted nature of the issue, emphasising the importance of collaborative efforts involving both private and public stakeholders to create sustainable solutions that cater to the financial needs of students while maintaining investor viability.

Despite the urgency of the issue, there's a collective understanding that there are no easy, short-term solutions, underscoring the need for thoughtful, long-term strategies to address the complexities of student housing affordability.

9. Tech solutions for driving the student experience: The need for tech solutions often arise especially when human support is unavailable. At the panel on how technology could improve the student living experience, it was mentioned that 80% of student inquiries occur outside of office hours. This emphasises the importance of providing accessible and timely support for students through technological means such as chatbots and other creative solutions like creating communities on WhatsApp.  

Technological solutions like chatbots and personalised platforms cater to the evolving preferences of students. The significance of adapting to real-world student behavior, including out-of-office inquiries and communication channels like WhatsApp, was emphasised.

It was also emphasised that while it is important to create structured events, students need autonomy in creating their own experiences. This can be facilitated through the platforms that many operators provide such as community apps. This insight recognises the value of giving students the freedom to shape their social and community interactions and this improves their overall satisfaction.

10. Next-Gen Investment Strategies: Innovative investment strategies, such as mixing amenity spaces to combat social isolation and recognising the value of on-site programming, were discussed as important developments — and soon-to-be requirements — that are taking place.  

The conference highlighted a shift in preferences with a substantial increase in students, including graduates and upper-level undergraduates, choosing purpose-built rental developments because of what they have to offer.

The Class Conference 2023 offered profound insights into the nuanced realities shaping the European student housing landscape. From investment trends to sustainability considerations and evolving student expectations, the conference provided a comprehensive outlook on the future of PBSA, equipping stakeholders with the knowledge to navigate this dynamic sector effectively.

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