Managing education space in a COVID-19 environment

AUSTRALIA, 16 April 2021 – The current financial pressure being faced by education providers gives rise to new strategies to manage their property footprint and plan for the asset lifecycle.

Digital disruption, including more flexible ways of learning and interacting, has already changed how universities manage their campus buildings and learning space as a result of the transformation of their operating environment.

COVID-19 has required universities to shift again, driving a rethink of the size and orientation of campuses and the facilities and services they offer.

JLL’s Report, ‘High performing universities: 15 ways to lower costs and generate new revenues’ outlines practical ways to do this.

JLL Director and Education Solutions Lead, Dinesh Acharya said, “Education providers face new challenges to keep costs under control while ensuring they provide an optimal campus experience.

“As universities address the challenges of operating in the pandemic era, they should look to leverage facilities and digital solutions in new ways to support their bottom line while enhancing student and staff experience.

“We believe there are at least 15 levers that can be explored by universities to lower real estate and operational costs and even create new revenue streams. It’s possible to pursue some short-term solutions that will help cut costs relatively quickly, while freeing up capital to explore longer-term strategies that accommodate the future of learning, teaching and work,” said Mr Acharya.

Cost saving strategies listed in the report include:

Analyse facilities data to identify and drive real-time operational efficiencies: Your facilities and land can contain hidden costs beyond the mortgage or lease payment. An analysis of your portfolio data, including facility management, operating and maintenance costs, will help you uncover inefficiencies and savings opportunities;

Pause operations in unoccupied buildings and floors: Given the need for social distancing on campus and the continued use of virtual learning, many campus buildings are likely to see reduced utilisation for the time being. Data-driven analytics can help determine whether buildings should be fully or partially closed and how to optimise facilities to reduce operating costs of unused buildings, while preventing long-term operating issues;

Uncover hidden operations and maintenance costs: Periodically checking your properties can help you avoid unpredictable repairs, reduce replacement costs and keep equipment running more efficiently;

Revenue-generating strategies listed in the report include:

Monetise underused resources and spaces by sharing facilities with partners and public: As more universities shift toward a centralised space management model, there will be greater opportunities to unlock efficiencies by sharing buildings and spaces across faculties. There may even be opportunities to monetise underused or empty space by sharing these spaces with industry partners and the public.

Revitalise underutilised land through ground leases: Whether it is a vacant piece of land, an older building with significant repair expenses or an off-campus student housing complex, a real estate asset like this can be considered for a ‘ground lease’ to a developer to potentially generate long-term rental income and tax revenues.