Social Infrastructure

Student accommodation

Purpose-built student accommodation (PBSA), halls and studios let to students for the academic year. The demand-driven outlier in social infrastructure: not a contracted availability PPP but operational real estate, where revenue is occupancy × rent. That means genuine demand and re-letting risk, and an annual letting cycle, but also rental growth and operating leverage. Pick a real operator below and follow it through the building, the model and a working returns model.

In focus ·
Example

Drag the sliders to see what earns the money, the number of beds, the rent each pays per week, and how fully the building is let. Lit windows are occupied rooms; the lit fraction is the occupancy.

600 beds
Beds
Let (occupancy)
Rental income
rental income p.a.
EBITDA p.a.

01

What it is & how it works

02

How it earns

Model A · operational real estate

Operational real estate (occupancy × rent, the demand-driven outlier)

Purpose-built student accommodation is operational real estate, not an availability PPP. You build and own the halls and let beds to students, so revenue is occupancy × rent, beds let, the rent each pays per week, over the tenancy weeks of the academic year. That makes it the demand-driven outlier in social infrastructure: there is genuine demand and re-letting risk, re-priced every year in the annual letting cycle, unlike a PPP whose revenue is contracted. In return there is rental growth (PBSA has had strong rent growth where supply lags student numbers) and operating leverage, much of the running cost is fixed, so a full building earns a high NOI margin while a soft letting year compresses it. Nomination agreements, where a university block-books beds for a multi-year term, provide a partial contracted floor; the balance is direct-let, carrying the demand risk but capturing the upside. PBSA trades on tight cap rates, so the exit is a high multiple of stabilised NOI.

03

What it costs, and how it's financed

Rental income → operating costs → EBITDA / NOINOI margin

The capital, net of contributions
Who funds the buildallocation

    History & framework · key milestones
      04

      Cash flows & returns

      Build & growth

      k
      m
      %
      %

      Revenue regime & tax

      m
      m
      %
      ×

      Financing & hold

      ×
      %
      %
      y
      Unlevered IRR
      asset / project return
      Levered IRR
      return to equity
      Equity multiple
      MOIC over hold
      Payback
      project, undiscounted
      Cash-flow profile, equity invested   returned
      Show the year-by-year schedule
      05

      What drives the return

        See also the Student accommodation simulator, model a single scheme through its letting cycle, and the Cash-flow & DCF model.