Transcript PRIVATE UNIVERSITIES IN INDIA, an Investment in National

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Private Education in Dubai:
Opportunities for Continued Growth
Prepared By The Parthenon Group For
UK Education in Dubai: What Works, London, 2013
Parthenon’s Education Practice
On-the-Ground Education
Sector Projects
Completed by Parthenon
Agenda
Regional Drivers
K-12
Higher Ed
Early Years
GCC Countries Seek to Increase the
Economic Contribution from Non Oil Sectors
Proportion of Non Oil GDP (Current Prices)
100%
2012
86%
80
2017E
74%
79%
69%
68%
57%
60
65%
55%
60%
49%
52%
43%
40
20
0
GDP 2012
Estimated
Bahrain
Kuwait
Oman
Qatar
Saudi
Arabia
United Arab
Emirates
$28B
$202B
$79B
$196B
$652B
$386B
Significant Investment is Required in Education
Infrastructure in GCC Countries
Ratio v/s PPP Adjusted GNI Per Capita, 2007
100%
Republic of Korea
Finland
Tertiary Enrollment Ratio
Greece
New Zealand
80%
Ukraine
Lithuania
Belarus
Lebanon
Iceland
Latvia
Portugal
Chile
Czech Republic
France
Netherlands
Ireland
Austria
Switzerland
Croatia
Cyprus
Turkey
Armenia
Colombia Brazil
Tunisia
China
Nepal
Indonesia
Laos
Myanmar
0%
$0
Uzbekistan
Hong Kong (China), SAR
UAE
Mexico
Bahrain
Algeria
Oman
Saudi Arabia
Tajikistan
20%
Burundi
Ethiopia
Belgium
Israel
Jordan
40%
Vietnam
Sweden
Italy
Slovakia
Bulgaria
Norway
Australia
Hungary
Estonia
Uruguay
Poland
Romania
60%
United States
Denmark
Kuwait
El Salvador
Guatemala
India
Azerbaijan
Morocco
Cape Verde
Bhutan
Pakistan
Bangladesh
Ghana
Burkina Faso
Tanzania
Madagascar
Brunei Darussalam
R2 = 70%
$20,000
$40,000
PPP Adjusted GNI per Capita
$60,000
What are the Drivers of Private Education in GCC Countries?
Young Population
• 55% of the population in
UAE, KSA, Kuwait,
Oman and Qatar is
below 30 years old
Increasing Affordability
Need for International
Education
• GDP per capita for UAE,
KSA , Kuwait, Oman
and Qatar have grown
by 5-10% between in
last 5 years
• Higher Education
Enrolment in Western
Private Colleges has
grown the fastest in last
3 years in UAE
• Premium International
and Mixed Curriculum
market in UAE is 5X of
that in India and similar
to China
• Private international
schools in Riyadh,
Jeddah and Sharqiah
have grown faster than
the market
Growing Expat
Community
• Expats account of ~30%
of the population in
GCC countries and
~80% in the UAE
• The number of
expatriates living in
GCC countries have
increased by nearly 20
per cent over their
number in 2005
Specifically, Dubai offers a real opportunity for private education operators
Higher Ed
K-12
UAE has the largest market opportunity in K-12 and
Higher Education
UAE
Singapore
Malaysia
China
$1.9B
$0.7B
$0.3B
$1.7B
Can Locals attend
international schools?
Yes
No
Yes
No
Market Size of TNE
$148M
$520M
$385M
--
International Student Growth
6%
-11%
-4%
--
Market Size of International
Private
K-12
Agenda
Regional Drivers
K-12
Higher Ed
Early Years
What do K-12 operators look for?
Market
Opportunity
Market
Stability
Clear, Transparent
Regulations
Non-oil sectors in Dubai have been growing at 3%
since 2008
Dubai Market Growth by Sector, 2008-16F
CAGR CAGR
('08-'12 ) ('12-'16)
3%
4%
$125B
$111B
$104B
Other
$97B
100
$92B
$92B
Construction
Govt. Services
75
Business Services
Finance
Manufacturing
50
Transport
25
Wholesale
and Trade
0
2008
2010
2012F
2014F
2016F
Both Emirati and non-Emirati enrolments are growing in
K-12 in Dubai
K-12 Dubai Private School Enrolments, 2008- 2012
CAGR
('08-'12)
7%
300
207K
200
178K
182K
193K
6%
157K
Emirati
100
7%
Non-Emirati
0
2008
2009
2010
2011
2012
The premium market is large and growing
Dubai Private Premium K-12 Market Size, By Curriculum, 2012
(Premium Schools > $13K
100%
$274M
School X
School X
School X
School X
School X
School X
$95M
School X
School X
School X
School X
School X
School X
80
Percent Of Total
60
40
School X
School X
School X
School X
School
School
School
School
School
X
X
X
X
X
School X
School X
School X
School X
School X
20
$80M
School X
School X
School X
School X
0
Total
Enrolment
British
IB
American
20K
8K
5K
$14K
$14K
$17K
Enrolment
Growth
11%
8%
9%
Fee Growth
2%
3%
3%
Average Fee
Total =
$450M
Parents in Dubai prefer British curriculum schools
Q: Please rank the top preference for type of curriculum for your child?
100%
100%
American
80
IB
60
40
British
20
0
Premium school parents
British/British + IB curriculum is the most in demand amongst parents
Even through the economic turmoil of the recession, K-12
enrolments have continued to grow
K-12 Dubai Private Non-Emirati Enrolment Growth and GDP Growth, 2001-2010
0.2
Private Non Emirati
Enrollment Growth
0.1
0.1
0.0
6.0%
Real GDP
Growth
3.2%
2.4%
0.0
Spread Between
GDP Growth and
Enrollment Growth
-2.4%
2001 - 2007
2008
2009
2010
1.8%
9.3%
5.1%
3.6%
What are investors looking for in a regulatory system?
Transparency
Quality
Pricing Mechanism
KHDA’s pricing mechanism ensure operators and
investors of a clear, transparent regulatory system
1
Regulators determine a
baseline index of
education costs
3
Regulators conduct
annual quality ratings of
each school
2
School fee increases are
allowed based on quality
ratings, and pegged to
baseline cost index
% of Schools Receiving Ratings
Approved Price
Increase Amount:
Sample Rating Factors
Sample Costs Included in
determining baseline index
Utilities
Rent
Academic Performance
Attendance
Facilities
Teacher Quality
Retention Rates
Teacher
Costs
100%
Excellent
Baseline
Index x 3
Good
Baseline
Index x 2
80
60
Baseline Index Of
Education Costs
Quality Rating Scale
1.
2.
3.
4.
Excellent
Good
Fair
Poor
Baseline
Index
40
Fair
20
0
Poor
Mechanism to regulate price increase if instituted needs to be transparent and should
encourage investors and private operators to invest in building quality institutions
Baseline
Index
Before entering Dubai, schools should understand how
their offerings fit into the market
Revenue
Define Market &
Competition
• Enrolment No.
Key
Considerations
• Tuition Fee
Competitive
Benchmarking
• Facilities and
• Drive Times to school
• Expected Share of
infrastructure
and parent preference
Forecast Demand
• Parent Satisfaction
• Grades
Market Size
Fee Growth Potential
Output
Target Schoo l
School 1
60
School 2
40
Competitor
School
Target School
Target
School
20
0
Future Enrolment
Potential
Cost Improvement
Potential
Facilities
100%
80
• Income distribution of
settlement population
• Curriculum
Key
School
Enrolment
Potential
Catchment Area
Analysis
School 3
City A
Competitor
School
Competitor
Schools
Outside
City A
Accurate Assessment of Local Supply and Demand Determines success in K-12 Sector
Adjustment for
Locations
Agenda
Regional Drivers
K-12
Higher Ed
Early Years
The TNE market in the UAE is large and growing quickly
• 2012 Revenue:
~US$105M
• 2012 Revenue:
~US$150M
UAE
India
Revenue CAGR
(‘08-’11)
>15%
Vietnam
• 2012 Revenue:
~US$30M
10-15%
• 2012 Revenue:
~US$148M
Malaysia
Indonesia
Bra
zil
Singapore
• 2012 Revenue:
~US$40M
5-10%
<5%
Size of the bubble
represents the total revenue
of acquirable assets
• 2012 Revenue:
~US$385M
• 2012 Revenue:
~US$520M
Many institutions have already entered Dubai to set up
branch campuses
Australia
UK
US
Other
The UAE has potential to attract international
students to branch campuses
10%
6%
5
Growth Rate
('10-'12)
0
Growth Rate
('10-'12)
-5
Growth Rate
('10-'12)
-4%
-10
-11%
-15
Malaysia
Singapore
UAE
Dubai offers the most favourable regulations for setting
up an institution
Attractive
Unattractive
Dubai
Singapore
Malaysia
3-6 months
9-12 months
24-30 months
Complexity of
Regulations
Time Required to
Obtain Approvals
Foreign Ownership
Types of Offerings
Allowed
Approval Body
Ease of Entry
The most successful universities offer employability
related courses
100%
Other
Health Science
ComputerScience
Engineering
Placement rate of 70-80%
compared with other
institutes at ~50%
Business/Mgmt
Private Western
~70-80%
Foreign branch campuses can improve their
appeal by offering transfers to the home campus
Students at other private
western universities can
articulate only after year 3
Articulation
Option
Herriot-Watt
Private
Western
University of Wollongong in Dubai
Middlesex University
Canadian University of Dubai
Public
Public Universities





Year 1
Year 2
Students have the option of
completing a part of the
program at Heriot-Watt
campus in Edinburgh
Year 3
Year 4
If the student completes final
year in India or UK, a UK
degree is awarded
A transfer to a Western home campus improves a student’s job prospects both at home and abroad
Agenda
Regional Drivers
K-12
Higher Ed
Early Years
The early years market is small and fragmented…
Market Size of Dubai Independent Private Nurseries, By School,
By Price Point, 2013
100%
Scho
oo
oll X
X
Sch
School X
S choolX
S choolX
School X
School X
School X
School X
80
School X
School X
School X
School X
School X
School X
60
School X
School X
School X
School X
40
School X
School X
School X
School X
20
Number of Nurseries
Total Enrolment
Average Fee
Revenue CAGR
Scho
oo
oll
Sch
School
School
School
School
School
School
School
School X
School X
School X
School X
S chool X
S chool X
S chool X
S chool X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
S chool X
S chool X
S chool X
S chool X
S chool X
S chool X
S chool X
S chool X
School X
S choolX
S choolX
S choolX
S choolX
S choolX
S choolX
S choolX
School X
School X
School
School
School
School
School
X
X
X
X
X
X
X
X
X
X
X
X
X
X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
S chool X
S chool X
School X
School X
School X
School X
School X
School
School
School
School
School
X
X
X
X
X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
Super Premium (>$9K)
Premium ($7-9K)
Medium
($4-7K)
School X
School X
0
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
School X
Total =
$108M
School X
School X
School X
School X
School
School
School
School
School
X
X
X
X
X
School X
School X
School X
Low
(<$4K)
26
45
45
27
3.0K
5.2K
4.0K
2.4K
$10.2K
$8.2K
$6.5K
$3.4K
21%
35%
22%
16%
But all segments are growing quickly
Enrolment in Independent Private Nurseries in Dubai, By Price Point, 2010
and 2013
15
14.7K
CAGR
2010-13
19%
Super Premium
17%
Premium
29%
Medium
17%
Low
10%
10
8.7K
Super Premium
Premium
5
Medium
Low
0
Number of
Nurseries
2010
2013
87
143
EYFS is the most popular curriculum option – the source
of most incremental enrolment growth
Enrolment in Independent Private Nurseries in Dubai, By Curriculum, 2010-13
0.7K
15
4.5K
0.4K
0.4K
14.7K
CAGR
2010-13
19%
Other
15%
International
14%
Montessori
10%
EYFS
23%
Other
International
Montessori
EYFS
10
8.7K
Other
International
Montessori
5
EYFS
0
Number of
Nurseries
2010
EYFS
Incremental
Montesorri
Incremental
International
Incremental
Other*
Incremental
2013
87
37
2
2
15
143
Parents want English as the language of instruction, even
in early years
Q: What is your preferred language of instruction for your child?
100%
Arabic
Bilingual
Arabic
Bilingual
80
60
English
English
40
20
0
Expats Preferred Language
Emirati's preferred Language
UK Education in Dubai:
Opportunities Across Sectors
K-12
• Robust market
characterized by strong
demand for British
curriculum
• Dual demand for British
and local curriculum from
Emiratis and expats
• Clearly defined licensing
and regulatory system
Higher Education
• Significant opportunities
for TNE/foreign branch
campuses
• Scope for international
student growth
• Supportive regulatory
environment
Early Years
• Nascent market with strong
growth in enrolment
• Preference for EYFS and
English medium
• Regulatory environment
required to support growth
Thank You
for regular updates on events, research and reports
@Parthenon_Group
@Karan_Khemka
www.parthenon.com