Rental income makes student housing an ideal candidate for PFI. Stephen Hoare looks at two case studies.

The phenomenal rise in student numbers in higher education means Britain's universities are bursting at the seams and college bursars and estates managers are looking at ever more inventive solutions to avert an accommodation crisis.

The University of Wales at Cardiff found the answer was to go for a modular building - the method used to construct portable classrooms. But far from being temporary, the university's new accommodation block, completed three years ago, has a lifespan of up to 50 years or more.

The advantage to the university was speed of construction - the building was ready when needed. Brian Woodham, managing director of builders Rovacabin, says: "We got access to the site in June and students moved in in October. You would have to add a year to that for a conventional building."

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Part of the Mowlem construction group, Rovacabin's structures are factory built. Site erection is swift because most of the work has been carried out long before Rovacabin turn up on site. The prefabricated standard elements are enclosed in tubular steel frames which provide structural strength. Stacked and bolted together, the steel framed units are then clad with a skin of brickwork built up from foundations dug around the structure and a pitched roof is added.

Designed by specialist modular building designers TMT, the University of Wales's four-storey 64-bed student block has the external appearance and protection of a traditional brick structure. The same technology is now being used to speed up the construction of office blocks, hotels and sports stadia.

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Rovacabin is part of the National Prefabricated Building's Association, whose figures show that a quarter of the industry's annual Pounds 250 million turnover comes from the education market. Universities account for some Pounds 10-20 million of this business and are a significant growth area according to Mr Woodham. But not always for student accommodation.

Terrapin recently completed a multi-storey teaching block for Northampton College in 24 weeks. But sales director Mike McLellan says universities and the financial institutions are shying away from modular system building for student accommodation because it is too expensive.

There is little cost advantage to a prefabricated building because it has to comply with the same building regulations as a steel or concrete structure, he says.

But modular buildings offer other solutions. One of Rovacabin's contracts is to supply modular bathroom pods to a hall of residence being built by Mowlem for the University of Staffordshire. The building method is traditional but Rovacabin is supplying factory-built bathrooms which come completely plumbed and fitted and are craned into position inside the building's frame.

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Mr Woodham estimates the University of Wales job probably saved no more than 10 per cent of the price of a conventional building with a cost of around Pounds 12,000 per bedroom. He claims the construction method offers a more important advantage than cost saving. "It means a college can work within one financial year and plan from April when they already have a clear idea of what student numbers will be."

Terrapin's Mr McLellan says: "It is worth colleges investing more during the early stages to get a better lifetime cost. The cheapest prices do not always mean the most cost-effective solution.

"Student rents and building costs just don't equate. Colleges are paying for the accommodation over 12 months but are only getting an income for 30-40 weeks."