Rosita Mendonca, Operations & Marketing Director at J3 Advisory, said: “Across much of the PBSA market, demand and investor interest remain strong, although conditions vary by location and scheme. The opportunity is to translate those fundamentals into deliverable projects that are supported by the right capital, insurance and technical strategy.
“New student accommodation has an important role to play in supporting universities, relieving pressure on other parts of the rental market and contributing to investment in towns and cities. The focus should be on creating a dependable route from demand to delivery.
“That means making connected decisions early. A funding structure cannot be considered separately from lender requirements, technical due diligence, the structural warranty, the construction programme or the scheme’s long-term operating model. When those elements are aligned, they can support rather than obstruct delivery.”
A £60 million, 267-bed development on Old Kent Road in Southwark shows how those dependencies work in practice. Its structural warranty had to align with the construction programme and technical profile, with inspections and outstanding requirements coordinated through to practical completion.
J3 says the case demonstrates a wider delivery issue: schemes cannot rely on demand figures alone, and the combination of decisions needed to satisfy funders, insurers and technical stakeholders will differ according to the site, design, procurement route and intended operation.
Why delivery risks differ across PBSA schemes
The balance of risks will not be the same on every project. Site conditions, design, procurement, lender requirements, ownership and the intended operating model can each change what must be resolved and when.
For some developments, the central issue will be demonstrating local demand and an affordable room mix. For others, construction methodology, inspection requirements or the proposed ownership structure may shape the route forward. Identifying those dependencies early allows the design, procurement and funding strategy to respond before they become obstacles to delivery.
“Another scheme may involve a different demand profile, delivery partnership, construction method or exit. The lesson is not that every developer should follow the same sequence, but that the relevant commercial and technical considerations need to be understood together and addressed at the right stage for that particular project,” Rosita said.
“The long-term fundamentals of PBSA remain compelling, but successful delivery depends on detail. When demand, design, finance, insurance and the operating strategy support one another, developers are better placed to convert opportunity into completed accommodation,” Rosita concluded.
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