UNITE
Boxwood, 2009
Transforming Service in Student Accommodation
Summary
The UNITE Group plc pioneered the creation of a new financial asset class dedicated to student accommodation, and manages co-investments in excess of £2 billion on behalf of institutional investors. These funds are invested in 130+ properties housing almost 40,000 students across 23 cities. The key driver of value creation for these investments is profitable growth of occupancy and rent.
In early 2008, it was clear that the profitability of each property was being eroded by escalating operating and overhead costs, driven by a fragmentation of the customer proposition and operating model. Boxwood was asked by the CEO and COO to establish a programme to transform the business, and in particular address an overhead challenge that they had “bounced off twice”.
Over the next two years, a joint UNITE / Boxwood team transformed the service proposition, operating model and overheads achieving:
• Increased rents by a record 12% (like-for-like)
• Reduced operating costs by more than 13%
• Reduced overheads by more than 24%
• “A Customer Led, City Driven and Profitable” business
What could UNITE not have done without Boxwood’s assistance?
Without Boxwood’s assistance, UNITE would not have so rapidly aligned the needed teams across Operations, Sales, Customer Experience, Security, Health and Safety, Facilities, Estates, HR, Finance and IT. The methods, tools and ways of working used to drive operational performance across organisational boundaries resulted in dramatic improvements to profitability and customer service.
UNITE is the UK’s largest provider of bespoke student accommodation serving universities and nearly 40,000 students countrywide. A key driver of value creation for UNITE is maximising occupancy and realised annual rents from rooms under management. To this end, UNITE has built deep expertise and insights into the needs and buying behaviours of students through targeted research.
In principle, this insight should lead to a genuinely customer focussed and profitable business. In practice, rapid and entrepreneurial growth had generated inevitable variation of standards across the properties. Local practices were the “norm”, customer satisfaction was inconsistent, rebooking rates impaired, and tactical “fixes” and workarounds common. This variation was driving unnecessary operating costs and overheads.
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