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Class of 2020: Goalposts move for educators and investors

Frank Uffen and Yooni Kim lead The Class of 2020 conference.

Despite the challenges faced by students during the pandemic, the purpose built student accommodation (PBSA) asset class still tantalises investors, desperate to have more of it as an alternative to the traditional fare of offices, shops and sheds.

But the pandemic has shown that the asset class may need to evolve to accommodate rapid changes in higher education. This made the recent Class of 2020 conference even more relevant than usual.

Held recently and virtually, this year’s event was dubbed: The Class Graduation Conference: Fast-forwarding Our Future.

The conference observed that the current health and mobility crisis has prompted the education industry to rethink and new trends have emerged. The birth of “the bedroom campus” has given rise to an “anywhere learning” concept that is forcing more collaboration within the university sector. On-demand and “anytime learning” will meanwhile challenge the current education system and “touchless interaction” will intensify, delegates heard.

Speaking during the event Martin Paul, who is president of Maastricht University and chair of Young University for the Future of Europe explained that the concept of a university as a building or group of buildings on the periphery of the city, is being replaced by that of being more simply small spaces where students can learn.

“We need to break down walls between faculties, students, and citizens. These new learning spaces will become spaces for interaction between citizens, bringing students together with other members of society,” he said.

Boundaries will blur in the ‘blended’ future

A blended future beckons, one in which boundaries of living, working, and learning will blur. This will force real estate to think beyond traditional asset classes once divided by core functionality and rethink the value and purpose that space can offer to customers and investors alike.

According to keynote speaker Dror Poleg, author of Rethinking Real Estate, “in a world of abundance, the best way to create value is to tap into new scarcity, into things that are becoming more precious in this world.”

Currently, he added, “there is a scarcity of human connection, privacy, truth, meaning and agency, and education.”

Delegates heard that a number of drivers are at work. Technology will redefine basic assumptions about location, visibility, zoning, capital, and information in real estate. Critical young consumers and stricter sustainable investment criteria will force real estate players’ hands.

The ability to articulate values and purpose will be a key differentiator for real estate operators and asset managers to create portfolios with institutional investors and public/private partnerships. Customer-focused flexibility and community will remain the key value proposition when responding to a fast-changing environment.

Hans Op ‘t Veld, head of responsible investment at PGGM Investment said: “A lot of institutional investors need to reinvent themselves. We are no longer in an economy where ownership is everything. Now access is much more important.”

“The assessment of your unique selling point goes well beyond the provision of capital.”