With quality of university facilities increasingly becoming a key consideration for prospective students and league tables alike, university accommodation holds promise as an asset class. Private investors are continuing to look to the traditionally resilient market for portfolio diversification but – as Rachel Goult, Director, Global Infrastructure Ratings, S&P Global Ratings, suggests – this could be about to change.
In a commentary article for IPE Real Assets, Goult explains how markets factors – including increasing tuition fees and distance learning – may cause uncertainty around the volume of future student applications and, consequently, the demand for accommodation. Although unlikely to affect universities at the top of the leagues, these factors could significantly impact accommodation development projects at lower-ranked universities and the ability of such universities to service debt.
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