British universities have increased construction by 43% in the past six months, compared with the previous year, in the race to expand campuses and draw lucrative foreign students.
Record campus investment driving demand
British universities are carrying out the largest redevelopment projects since the 1960s.
“Since the change in the tuition fee regime universities have focused on improving campus facilities in the increasingly competitive market of attracting prospective students. This has involved using increased student fees and debt markets to invest heavily in construction projects.”
– Michael Dall, lead economist, Barbour ABI
Contracts have been awarded for £1.5bn of projects, five of which are worth more than £50m each. A further £2bn of contracts are planned between 2017 and 2020, according to Barbour ABI, the construction analysts.
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Targeting wealthy overseas students
Impressive campus redevelopment projects are designed to attract wealthy fee-paying students from around the world. There is a new-found confidence among leading universities, which are flush with money from increased student tuition fees and have access to cheap, long-term credit.
Overseas students are a key demographic for Purpose Built Student Accommodation. They appreciate the hassle free nature of this social living environment, and have the resources to pay the required rental premium over residential property alternatives.