Special report: Property market predictions for 2025 HIGHER AND FURTHER EDUCATION
In this special report experts from leading UK property consultants reveal their predictions for the higher and further education real estate sector in 2025
Government funding and increasing pressures will drive more institutions to form clusters with wider industry and lead to college-to-college mergers
SADIE JANES, Director and co-lead of Savills Education group
The Government unveiled its new Invest 2035 Industrial Green Paper in October 2024 which, with its emphasis on delivering the skills agenda, R&D, and innovation, gave a high priority to the role of higher and further education.
This is likely to see more institutions looking to cluster with wider industry, deliver more mixed-used opportunities, and move beyond campus boundaries to orchestrate a much greater mix of users, partners, customers, and ‘big thinkers’ in one place.
Increased skills delivery to support industry will also be a priority for 2025, with devolved and local authorities looking to grow training opportunities for 16-19 year olds through their local education institutions.
Higher Education institutions will be looking to partner more this year with developers and investors to deliver capital projects
Last year’s Budget committed £300m funding to maintain and improve Further Education estates, which will help deliver a component of this in the short-term into 2025, but long-term growth and life-long learning support will require further funding and likely greater integration with Higher Education.
Against this backdrop, we may see more college-to-college mergers this year, to add to the 82 which have taken place since 2015.
Higher Education institutions will be looking to partner more this year with developers and investors to deliver capital projects.
This is likely to go beyond student housing to consider alternative delivery models for core assets, and how universities can deliver their estate strategies in an agile and resilient way against a continued backdrop of funding constraints.
We have seen a lot of activity in London from regional HE institutions taking space, principally on leasehold basis; this may start to be seen more actively across the UK’s regions.
Alongside, or in addition to, seeking more partnerships, universities may look to ‘rightsize’ their estates and dispose of spaces which are now surplus to requirements given the establishment of hybrid working and new teaching methods.
We have seen a lot of activity in London from regional HE institutions taking space, principally on leasehold basis; this may start to be seen more actively across the UK’s regions
Ultimately, this may mean a greater number of universities selling assets or land.
However, the majority of discussions we are currently seeing are focused on how to use surplus assets to diversify income, promote an institution’s civic role better, deliver on R&D or key growth sectors, ensure a potential legacy factor for the university across assets, and/or improve the student experience and workplace wellbeing.
Lastly, while mergers between HE institutions aren’t new, with continued headwinds we may see more exploring this as an option this year.