Stock schools
It's school time - and that's opening a bag of opportunities for investors and school operators in the UAE. With another 100 odd schools needed by end of the decade, there will be plenty of action. Image Credit: Shutterstock

Dubai: With more than 100 schools likely to open in the UAE by 2030, investors – new as those with already sizeable interests - are queuing up to seize their opportunities.

“Dubai alone has around 220 private schools (from 136 in 2007-08), and the emirate’s education sector is poised for significant expansion, with a 25 per cent increase in land area to be allocated for educational purposes,” said Dr. Adil Alzarooni, founder of Citizens School. He reckons that the UAE will need close to 150 new schools to meet the expanding student population.

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Forecasts suggest that around 150,000 students will enroll in UAE schools by 2027, which will require ‘more international schools to set up campuses in the Emirates’ said Dr Alzarooni. “The UAE’s K-12 (kindergarten to 12th) sector is ripe for investment’.

“The market is ready for expansion, with investments in existing and new institutions to meet evolving educational needs. The sector is characterized by large investments, an emphasis on quality, and inclusivity across various levels of education.”

Will school boom see new operators too?

Recently, the UAE K-12 sector again came into the spotlight with the country’s biggest school operator, GEMS, confirming that a stake sale was happening that would see Canadian fund manager Brookfield become an investor. This straightaway makes it the single biggest deal the sector has seen over the last 5 years. And the previous big one? When CVC Partners, another investment firm, took equity in GEMS.

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Industry sources say that given the prospects, it’s a given that new investors will have similar plans to tie up with other school operators in the UAE.

Last year, India’s JV Ventures confirmed plans to spend up to $1 billion to buy between ’12-15 schools’ in the UAE and the region.

The company, whose portfolio includes Sancta Maria International schools in Hyderabad and the Jain Group of Institutions, buys school assets from a current owner and collects a lease amount on them. International operators will carry out the day-to-day functions, taking the burden of infrastructure away from the operators.

JV Ventures has allotted about 30 per cent of its funding to the UAE. “Dubai’s K-12 market is vibrant, and we are moving ahead with definitive plans,” said Vishal Goel, co-Founder of JV Ventures, adding that updates about which UAE schools the company would be investing in would be announced ‘very soon’.

These schools will be opening soon:

  • Noya British School, Abu Dhabi: opens September 2024 (owned by Aldar)
  • GEMS Founders School, Abu Dhabi: opens August 2024
  • Dubai British School Jumeira: opens August 2024 (Taaleem)
  • Dubai British School Mira: opens August 2025 (Taaleem)
  • GEMS Founders School Dubai South: opens August 2024
  • Dubai English Speaking School Academic City: opens August 2025 (DESSC)

Allocations for new Dubai schools

Dubai’s Knowledge Fund Establishment’s investment portfolio increased by 47.2 per cent between 2022-23, which are used on schools, early education centres, and other educational projects.

The Establishment allocated more than 2.8 million square feet of educational assets in Dubai to investors and operators in the  sector last year, which is an eye-popping 211 per cent increase from 2022.

Ahmed Abdulkarim Julfar, Chairman of the Board of the Knowledge Fund Establishment, said, “The market value of the Knowledge Fund Establishment’s investment portfolio has exceeded Dh1 billion. These investments will play a significant role in meeting the education sector’s needs.”

Last year, the fund provided more than Dh250 million to support education initiatives.

What makes UAE K-12 so attractive?

Kam Bhamra, the Regional Managing Director of International Schools Partnership (iSP), Middle East, said, “No other country perhaps enjoys the diverse range of curriculum and choice available today.

“This ensures that the country can cater to students from across the globe. With the UAE’s GDP predicted to grow exponentially with a direct impact on the local population, the education sector plays an important role.”

iSP has over 80 schools in 22 countries, including the English College in Dubai. “The regular influx of an expat population drives the thriving local economy, and demand for high-quality schools continues to rise, especially in the new communities coming up across the emirates,” Bhamra said.

Not without risks

While investments in school assets are expected to yield a RoI of 7 per cent, the market is not without risks.

“The most evident challenge is the upfront capital required to establish a high-quality school, followed by operational costs,” said Dr Alzarooni. “Additionally, increased market saturation and competition may result in lower enrollment numbers.”