Schools: Profitable Real Estate?

For the latest in our Re:Think discussion series, we wanted to consider the question: Can schools be profitable real estate?

Not from a purely design perspective, but how can we as architects, masterplanners, developers and investors, reconsider the way schools are included in developments to actually create value rather than be seen as a cost. We will be hosting an open discussion around this topic on 29/09/2020 @ 10:30 and invite anyone to join us and input to the conversation.

As a starting point, here are our initial thoughts:

1. School buildings should be seen as the centre of a community.

A school’s normal operating hours are usually 9-3, which equates to 25% of the potential time it could be used in a day. Ok, a 24-hour school may be a bit of a push but, for example, let’s assume a school’s facilities can be used from 6am – 10pm which is 16 hours/day. If these facilities were properly utilised by a local community for things such as sports, adult-learning, cultural events, health & wellbeing or Youth clubs, the idea of a school being an education establishment would change to be the hub of a community – thus encouraging a greater sense of ownership by the locality.


2. Perception is that as a nation we won’t pay for good schools in our taxes – but we will pay more for a house close to a good school.

It’s well known that house prices are higher when in a catchment area for a good school, leading to gentrification of specific postcodes and abnormal variances in housing prices. Should we start to look at the reversing this cycle? We can’t guarantee that a school will always be at the same standard – what if a head teacher leaves and that establishment’s standards slip? Would we be willing to risk our house value on something like that happening? Investing in a school first and understanding that it will bring far greater value to a wider community – or in our cases future development, would yield greater value in the long run.


3. Just like many other building types, schools need to be flexible.

As with many standards, as soon as they are written, they’re almost always out of date. Modern, purpose-built schools are built to minimum requirements for a specific number of children and therefore will never be able to adapt to the changing demographic of people they serve. These schools also have no space for the extra-curricular amenities mentioned earlier and therefore can only provide one use – teaching a specific curriculum. Allowing for additional space to serve the community would not only bring additional revenue to the school but aid the school in its role in creating greater value to a wider area.

4. Re:Thinking the building we’re educated in will bring greater revenue to the people paying for it.

When considering schools in inner-city developments, our first thought is to the premium put on developable space. If schools are seen as a cost, they will always but overlooked for other, more profitable development options. If we change the way we look at the development process – in particular large-scale masterplan projects, the value of a school can be quickly seen. If a school can bring, for example, a 10-15% increase in property value, would it not be sensible to invest in a school at the start of a project rather than as a requirement once all the units have been sold? With a shift towards PRS developments in city-centres, surely a 10-15% increase in rental values would make a development stack up far easier. When considering the size of many of the developments LDA are currently looking at, 10-15% of 2-3000 units is not an insurmountable number.


5. Can we Re:Think the current PFI model?

With a shift away from retail as a safe Tenant in any development – could a school plug this void? If a developer were to see a school establishment as a safe 30-year leaseholder, unlikely to ever look to move, that school may become a far more attractive investment proposition? I would like to add that this final point is based on a very limited knowledge of the current PFI model and is a question rather than a statement – as with all points made in our Re:Think Series, all are supposed to create debate.

We look forward to discussing these specific points and any other than arise due to the conversation on 29/09/2020 @ 10:30 – you could reserve you place here: