_Future opportunities for the Saudi Arabian Education sector?
Knight Frank recently released the Dubai Education report which measures education affordability in kilometres rather than monetary value, and provides insight based on interviews with some of Dubai’s top school operators.
The report highlights that as the city and the Education sector develops, the immediate catchment area has an increasing influence on the long-term performance of the school. This is supported by the fact that schools which charge tuition fees beyond the means of people residing within immediate catchment of 5km, had lower occupancy levels compared to schools that were affordably priced for that location.
How Saudi Arabia can benefit from Dubai experience
KSA Education service providers can draw upon Dubai’s experiences (which has the highest ratio of private schooling in the region) to ensure that existing and new schools can maintain long term viability:
From the perspective of a KSA Education service provider, the following points should be considered when establishing a new school:
- Catchment area analysis is of growing importance, factors to analyse include:
- population size
- income profile
- competition
- requirements of the residents falling within the catchment area
- The target market is on your door step
- A value proposition is necessary to ensure long term profitability
"With overall conditions looking conducive for private sector participation, foreign education service providers are showing active interest in establishing their own schools in the Kingdom. "
From the perspective of a KSA real estate developer – especially those developing master planned communities, the following points should be considered:
- Education assets positively impact communities:
- improved occupancy (faster rate of occupancy and stable tenant profile – lower attrition rates)
- improved yields (rent and sales prices can command a premium)
- It is critical to understand the target market of the development as it will impact:
- type of operator
- size of school
- curriculum
With the existing high level of competition, it is critical for both education service providers and masterplan developers to undertake a through market analysis and work towards creating a value proposition for the end users. This will help ensure the school’s viability in the long term and in turn will positively impact the residential areas falling within the school’s catchment from a price and occupancy perspective.