Reflecting this during 2009, the sector is likely to be pulled in two directions - on one hand, it has a growing presence as an asset class due to the strength of its rental income cash flows and its anti-cyclical nature, i.e. that recessions trigger increased university attendance.

However, there is concern that the industry won’t be able to fund new projects, particularly where property or development finance is required. Confidence has been replaced by uncertainty and therefore potential financing partners are much more difficult to bring on board.

So for us, the challenge is actually to confront the industry uncertainty and demonstrate this capability to the market. To date we have carved a strong position in the market based on our robust and respected reputation. However, reputations can be easily lost and in 2009, we must ensure we maintain ours by meeting university requirements and managing their expectations.

We have already put measures in place to tackle – and indeed prevent – this issue. Firstly we have cultivated effective and open channels of communication and feedback with key banks. This has allowed us to amend our business model structure to help make our transactions more fundable in the current climate.

Secondly, we have shared our knowledge of the current funding markets with our university partners, both to manage their expectations for the year ahead and to gain their support in terms of the changes to our business model.

Thanks to this approach, we are able to be cautiously positive about 2009. We have a number of key deals in the pipeline which we are confident will be completed over the next twelve months and this should put us in a favourable position with potential future university partners who are finding direct funding increasingly expensive.

We are also confident we will see a shake out in the market place, as some of our competitors will not be very active outside London. In addition, the FM services and academic facilities offered by UPP will continue to allow us to stand out in the sector.

As 2009 progresses, we will be likely to see some competitors struggle to complete new debt-based deals, and some will abandon new developments entirely.

The larger firms will focus on the under-served London market where they can secure “better value” properties and charge higher rentals. As property values fall, existing projects financed through property-based loans will need to boost occupancy levels. There will also be some large new entrants into the market, attracted by the asset class.

However, these entrants have a steep learning curve to climb and will struggle to gain the confidence of a cautious university sector.

It is probable that universities will see higher demand from domestic students but a drop in overseas demand as the global recession bites (unless the devaluation of the pound draws more students to the UK).

This could have significant implications for UK universities’ funding abilities, especially as their endowments have been hit by a decline in the stock market.

It is also likely that the sector will press more strongly for the student fee cap to be lifted following the next election. Ultimately, universities will find debt financing more difficult and more expensive, causing current and future large-scale expansion plans to incur delays or be cut back entirely.

Driving forward, but cautiously, is the key to 2009.

The economic crisis is creating far more wariness than recent years, but an organisation that can run its projects as efficiently as possible, and one which moulds its business model to satisfy the needs of potential new partners and funders, will hopefully stay on track.”