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London Conference - Allan Hilton - Student accommodation


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London Conference - Allan Hilton - Student accommodation

  1. 1. Student accommodation what is the future for students in London? Allan Hilton Chief Executive Cass and Claredale Halls Of Residence Ass Ltd
  2. 2. Cass and Claredale Halls of Residence <ul><li>A small charitable Housing Association – turnover £2.2m, 10 fulltime staff, 37part time staff </li></ul><ul><li>Providing affordable accommodation to 377 university students in London </li></ul><ul><li>Location – East London: Hackney and Bethnal Green </li></ul><ul><li>Students from London Met, Queen Mary, City University, LSE, University of the Arts, UCL and others </li></ul><ul><li>2011/12 - 2600 applications </li></ul>
  3. 3. Claredale House Sir John Cass Hall <ul><li>Sir John Cass </li></ul><ul><li>Hostel style, large common room, communal showers, kitchens, garden. great community 131 rooms </li></ul><ul><li>Rents £115 per week, 39 week contract. Inclusive of internet, insurance and utilities </li></ul><ul><li>Claredale House </li></ul><ul><li>4/5/6 person cluster flats, with shower room and toilet, 246 rooms </li></ul><ul><li>Newly refurbished at a cost of £7.5m </li></ul><ul><li>Rents £125 per week for average room, 39 week contract. Inclusive of internet, insurance and utilities </li></ul><ul><li>Occupancy during term time 99%+ summer 2011= 92% mostly filled with interns from banks </li></ul>
  4. 4. Supply and demand <ul><li>272,000 students in London, 40 Universities (DJD) </li></ul><ul><li>150,000 students from outside the capital, including 50,000 outside the UK (source DTZ) </li></ul><ul><li>57,000 Halls rooms available in University and Private Halls (source CBRE) </li></ul><ul><li>Headroom 90,000 shortfall (source CBRE) </li></ul><ul><li>International represent 20% in London 14% in the rest of UK </li></ul><ul><li>10,000 rooms in the pipeline over the next 2 years </li></ul><ul><li>Result mismatch between supply and demand, which means private sector can charge premium prices </li></ul>
  5. 5. <ul><li>Source DTZ London Student Accommodation database 2011/12 </li></ul>Type of Accommodation in London
  6. 6. <ul><li>Source DTZ student Accommodation Database 2011/12 </li></ul>Who provides Accommodation in London
  7. 7. London accommodation costs <ul><li>University Halls - median price £119 per week, median annual rent £4549 (source DTZ) </li></ul><ul><li>Private Halls – median price £195 per week, median annual rent £8,849 (source DTZ) </li></ul><ul><li>Private Halls mostly 50 week contract - University mostly 39 weeks </li></ul><ul><li>Unite nearly 7000 rooms in London customers are 70% international (source Unite annual report 2010/11) </li></ul>
  8. 8. Nido King’s Cross (£175-£325 p/w) IQ Hoxton (£199-275 p/w)
  9. 9. Unite Canto Court Old street (£299 p/w) Urbanest Hoxton (£220 - £345 p/w)
  10. 10. Sell off Accommodation? <ul><li>London Metropolitan and City University sold accommodation </li></ul><ul><li>Prices pre sell off matching University average – 38 week contracts </li></ul><ul><li>London Met – sold accommodation to Opal </li></ul><ul><li>- Opal, Tufnell Pk En-suite £196 per week 51 week £9996 pa </li></ul><ul><li>- Opal, Arcade non En-suite £173per week 51week £8823 pa </li></ul><ul><li>City Uni – sold accommodation to Liberty Living </li></ul><ul><li>- Liberty Court En-suite £170 per week 42 week £7140 </li></ul><ul><li>- Liberty Hall Ensuite £170 per week 42 weeks £7140 </li></ul><ul><li>Would you want your son or daughter to pay these prices? </li></ul>
  11. 11. Sell off Accommodation? <ul><li>City University application to Cass and Claredale pre sell off 6% post sell off 14% </li></ul><ul><li>London Met Students tell me regularly that they will not come to London without room at Cass and Claredale </li></ul><ul><li>Is offering Student Accommodation part of the core product? Is it not about bums on seats not bums in beds? </li></ul><ul><li>Are Halls part of University experience! S.U. </li></ul><ul><li>University Finance officers looking for capital receipts on accommodation – family silver </li></ul><ul><li>Greater capital receipts means higher rents to students </li></ul><ul><li>University short of funds to invest in new Accommodation and wants it off balance sheet. </li></ul><ul><li>Who can afford hall fees of £7000+ only those from higher income families and overseas </li></ul>
  12. 12. Culture – how we do business
  13. 13. Culture – how we do business <ul><ul><ul><li>Opal will not issue keys until deposit and first term rent paid – cherry picking rich students, if you are waiting on loan forget it. </li></ul></ul></ul><ul><ul><ul><li>Liberty insist on parental guarantee or full yearly payment </li></ul></ul></ul><ul><ul><ul><li>Overseas student underwritten by City University </li></ul></ul></ul><ul><ul><ul><li>Unite will not accept packages for student at reception – too time consuming </li></ul></ul></ul><ul><ul><ul><li>All charge extra for monthly payments, many add on fees </li></ul></ul></ul><ul><ul><ul><li>Leaving University- still liable for rent until room filled </li></ul></ul></ul>
  14. 14. Culture - How we do bussines <ul><li>Private sector good 24/7 security </li></ul><ul><li>No subwardens/RA or onsite living staff </li></ul><ul><li>Little pastoral care, there is not money in it! Nido is an exception </li></ul><ul><li>No attempt to create community in terms of design of building or staff input - soulless buildings </li></ul><ul><li>Studio great ! How do you make friends? </li></ul><ul><li>First years need community – take all the doors off! </li></ul><ul><li>Events – Welcome, boat party, xmas dinner, Bonfire Night </li></ul>
  15. 15. Why Ensuite <ul><li>All new accommodation last 10 years in London En-suite mostly zone 1 and 2 </li></ul><ul><li>Banks are comfortable with the model and willing to fund it </li></ul><ul><li>Build costs for En-suite cluster not much more than for standard rooms in clusters due to HMO regs. </li></ul><ul><li>Refurbishments of existing liable for VAT, new build VAT zero </li></ul><ul><li>Able to charge a premium </li></ul><ul><li>Planning environment – Land very expensive so need premium product </li></ul><ul><li>It is what Universities have wanted for international students and prestige ? Is it what students want? </li></ul><ul><li>Private sector not willing to take a risk on alternative model </li></ul>
  16. 16. <ul><li>Private sector will keep delivering high end accommodation it does not know how to do anything differently, neither do banks know how to fund something different </li></ul><ul><li>Planning pipeline 9,700 rooms next 3 years all high end (souceCBRE) </li></ul><ul><li>Some London Universities will sell off accommodation </li></ul><ul><li>Local authorities getting upset - Planning rules will change and restrict high end accommodation, without university backing </li></ul><ul><li>Islington/Tower Hamlet - affordable residential </li></ul>Looking forward
  17. 17. Looking Forward <ul><li>Universities have opportunity to shape type of accommodation and communities </li></ul><ul><li>Universities should take a long view, investing in student accommodation is profitable, why else would the private sector do it. Universities are also better at managing them </li></ul><ul><li>What is wrong with hostel style accommodation for first years, affordable, sociable. Able to make friends </li></ul><ul><li>En-suite build costs £50K - £60K, Hostel style £35K </li></ul><ul><li>Deliver for £135 per week </li></ul><ul><li>Affordability!! </li></ul>
  18. 18. Student accommodation what is the future for students in London? Allan Hilton Chief Executive Cass and Claredale Halls Of Residence Ass Ltd [email_address]