Rewind just a few months and the student accommodation sector looked shaken by the Covid-19 pandemic.
But recent developments - namely the UK Government's exam results U-turn, and the lifting of the emergency cap on student numbers in England - mean there are reasons to be cheerful as we approach a new academic year.
UCAS has reported that 15,000 students who missed their offer first time around now meet their grade specifications following the Government's change of heart. Lifting the cap gives universities the opportunity to strive for something close to normality in terms of student intake - unthinkable just a few months ago.
From an investment perspective, it is yet more fuel to the argument that the purpose-built student accommodation (PBSA) sector is one of the most reliable and resilient real estate asset classes. These assets typically have high yields, universal occupancy, and are often underwritten by the universities themselves.
But there is no doubt that the sector is changing. Schools may be back, but online learning and limitations on socialising and extra-curricular activities are likely to become long-term trends, and will undoubtedly affect how students live and work. The winners of this challenge will be those who are able to offer a flexible product, targeted at the post-lockdown landscape and which differentiates them from private landlords.
Confidence and flexibility
Offering variable tenancies and no cost cancellations are ways to do this. Institutionally-owned products have the ability to adopt this approach - where buy-to-let landlords typically do not - and it will be a crucial factor in creating confidence and attracting students.
Many of them will be concerned that another lockdown, local or otherwise, may mean they end up trapped in rental payments for accommodation they do not need or cannot access. To overcome this, student accommodation providers can offer shorter term, flexible tenancies on a monthly or termly basis, and with the option to defer start dates or even cancel contracts should further restrictions be introduced.
Greater flexibility generally will allow student accommodation providers to attract those who may have otherwise stayed at home, but also those who might otherwise have chosen the private route.
Relocation, relocation, relocation
The shift to online learning can also create opportunities for investors in the long term. As more limited face-to-face teaching takes place, so the proximity of sites to university buildings becomes less important than the product on offer. This will free up sites for investment that may have previously been considered unsuitable because of location.
What that product looks like will also adapt. On-site offers and amenities will become increasingly important, as students look for a campus lifestyle closer to home. Key on the wishlist are likely to be top of the market connectivity, communal academic areas and high quality social meeting spaces, giving funds the opportunity to invest in a market of premium products with a high yield and long shelf life.
The past six months have emphasised to investors that the ability to be agile and flexible will be vital as we look to ride out the pandemic and drive recovery. It is encouraging that the student accommodation sector, which just a few months ago looked to be in serious trouble, is already back on track.
Now it is time for to ensure the financing exists for those willing to take advantage of a potentially exciting new landscape.
James Duncan is head of real estate investment at Winckworth Sherwood