Private schools are profitable, says Adec

Abu Dhabi Private Education Investment Forum. — KT photo by Nezar Balout

Abu Dhabi - Investment in private schools is a profitable venture, head of education regulator in Abu Dhabi said.

“The revenue of private schools last year was Dh3.2 billion. This clearly showed that investment in private education produces really good revenue,” Dr Amal Al Qubaisi, director-general at the Abu Dhabi Education Council (Adec), told investors on Monday.

Dr Amal Al Qubaisi

Speaking during the third edition of the Abu Dhabi Private Education Investment Forum in the Capital, Dr Al Qubaisi noted the need for more schools in the emirate to cater to the growing demand for seats in private education.

“Fourteen schools were opened last year providing 20,000 seats, but private schools still need more than 280,000 seats by 2020 or a further 60,000 extra seats in the next five years to accommodate all students in the Abu Dhabi emirate. This emphasises that investment in education in Abu Dhabi is a guaranteed success,” she pointed out.

She noted the pivotal role investors/operators play in investing in good quality private schools that contributes to the development of human capital.

Private schools cater to over 62 per cent of the total student population in the Abu Dhabi emirate, where 76 per ce nt of the expatriate students and 24 per cent Emiratis are enrolled.

Over the past five years, student population in private schools is growing at a steady rate of seven per cent.  In 2013/2014, around 215,000 students were enrolled in 184 private schools across the emirate.

The Adec private schools master plan anticipates a continuous growth in student population at five per cent to reach 283,798 enrollees by 2020/2021. To meet the growing demand, Adec is working on increasing investment activities in the sector to add space every year. This academic year, Adec expected to see the opening of 20 new schools which will open-up 44,000 seats.

 Investment in K-12

Discussing the global private schools market trends and practices, Robert Lytle, partner and co-head of the Education Practice at the Parthenon Group, said the K-12 is a good investment due to its long-term revenue viability, greater demand, prices are rising higher than inflation and because it has negative working capital.

“You collect your fees in advance (and) this has a positive impact,” he pointed out.

He said that private school potential in K-12 in the UAE “dwarfs” investment in any other place around the world, noting that the total market size of the UAE stands at $1.9 billion.

“If you’re looking to deploy capital, you should look at the UAE first,” he suggested. This is because the UAE, Abu Dhabi in particular is highly urbanised, have a very good mix of expats, high number of students and a “reasonably strong price points.”

According to Richard Barett, education and skills consulting lead at Deloitte, also pointed out that “process application (here) in my experience tends to be one of the fastest in the region.”

There are around 30 schools in Abu Dhabi that offer premium private school education (Dh30,000 and above), 12 of which are in the B and A (high performing) category. Among the medium category (Dh14,000 to Dh20,000), of the 31 schools, three are in B and A while those charging Dh8,000 and below fees (65 schools), two are in B and A. -olivia@khaleejtimes.com