Universities make about £1,400 a year on each student bed they own, a report has revealed, and have nearly doubled their rents in less than a decade.
In 2011-12, each bed space made more than £4,100 in income, but cost institutions only about £2,750 in energy, maintenance and other outgoings, according to Estates: The Foundations of Higher Education, released by the Association of University Directors of Estates.
The rent per bed was roughly £2,250 in 2002-03, but this increased by nearly £2,000 over the next nine years.
George Griffith, an associate director of property firm CBRE and writer of the report, said that the “substantial” increase had occurred as universities synchronised charges with the private sector.
Although rents have risen dramatically, costs have soared, too. Energy charges have increased and non-property related costs have roughly doubled since 2002-03.
“Really there’s not the information to explain what the non-property costs are,” Mr Griffith said, although he added that they were likely to represent spending on student services such as welfare.
He argued that it would be “unfair” to claim that the difference between income and expenditure was necessarily “profit” because it might be used to fund the costs of borrowing the money used to build the accommodation.
The bed spaces analysed are those wholly owned and serviced by universities, rather than private or jointly owned accommodation.
The report also says that capital spending in the sector fell by nearly a fifth to £1.84 billion in 2011-12.
But Mr Griffith said that universities, particularly Russell Group members, would find it relatively easy to raise money from private investors because they were seen as part of a “safe sector”. Only “one or two” institutions that Mr Griffith knew of were “fully leveraged” in the eyes of the Higher Education Funding Council for England, so most can take on more debt.
david.matthews@tsleducation.com
