Industry Leaders Insist On ESG as a Key Proposal For PBSA Market

Property Week’s Student Accommodation Conference, Showcase, and Awards 2022 were held in London on 7, December 2022. Property experts from the student accommodation sector participated in the conference to discuss the prospects for Purpose-Built Student Accommodation Market (PBSA) and the priorities for 2023.

Andrew Smith, the Head of Student Accommodation at Cushman & Wakefield, wanted PBSA market investors to consider Environmental, Social, and Governance (ESG) requirements for new developments.

Smith, who is leading the task of identifying the pros and cons of the PBSA market, says ESG investment must form the core of all investments in PBSA. “It’s no longer something we can ignore; it has to be a primary consideration.”

Speaking at the session titled ‘Investors’ Viewpoint: Market appetite and the investment roadmap ahead,’ Josh Miller, managing director, head of transactions, Europe, at Harrison Street, endorsed the view. He stated that if an asset was not best in class from an ESG viewpoint, they would not be interested in taking that investment.

“For groups like us, it has become challenging from an exit perspective when the time comes to sell these assets. If it is not ESG compliant, or [lacks] a great story around it, then there is not much liquidity in the market for it.”

There was unanimity among the panelists that the social aspect of ESG was vital in student accommodation. It helps create a sense of community which is important for such situations. Miller also emphasized the importance of focusing on and addressing mental health issues through onsite programmes.

Dan Mahoney, the co-founder of renewable energy specialist Sunclix, supported this stand while addressing the session, ‘Sustainability and the zero-carbon future.’ He was of the opinion that a lack of skills was holding back the student accommodation sector from hitting its sustainability targets. Providers had to wait for nearly a year to get retrofitting and other sustainability-related jobs because they didn’t have skilled professionals to carry them out.

“There’s suddenly a whole series of schemes [in this area], but it is happening a bit too late in the day,” said Mahoney. “A lot of people could potentially get into this, and there’s a need for more apprenticeships and schemes.”

Many other prominent persons echoed their support.

The National Head of Planning and Environment at Irwin Mitchell, Claire Petricca-Riding, said action must be taken to ensure people gain skills needed for the future. “How do we upskill people to go into greener jobs?” she asked. “There’s a need to get our heads around the issue so we can upskill a future workforce.”

There is expected to be a shortfall of about 500,000 tradespeople to deliver the retrofitting works required for UK properties, according to Charlie Hamilton, Strategic Account Director at Plentific, a property software management company. He says more people must be trained in green jobs and acquire skills in handling technology related to modern construction methods. Sustainable targets can only be achieved through behavioral changes.

“You can have the best fitted-out property in the world, but if the occupiers leave the windows open all the time, it’s obviously not going to be the most efficient building.”

Neill Birchenall, managing director of building consultancy ASK4, opined that student accommodation providers must understand technology and start gathering data to help achieve their sustainability goals.