GCC Education Sector Undergoing An Exciting Phase Of Growth, Says Alpen Capitals Latest Report

Alpen Capital today announced the publication of its GCC EducationIndustry Reportwhich presents the growth prospects of the GCC education sector, based on the current developments within the sector, key market dynamics, and the existing investment opportunities in the region. The scope of the report encompasses the pre-primary, primary, secondary, tertiary, and vocational training segments across all GCC nations. Further, the report profiles the six GCC countries as well as some noteworthy private educational institutions in the sector.

“The growth of the GCC education sector is driven by factors such as population growth, increasing number of expatriates, the rising importance of high-quality education in the society, and a growing spending propensity. The sector is gaining additional momentum from governments across the GCC that are acknowledging the need for an education system capable of producing industry-ready graduates. Thus, with increased focus on improving the quality and reach of education in the region, the sector presents an interesting investment opportunity”, says Sameena Ahmad, Managing Director, Alpen Capital

“The Education sector in the region is growing at a fast pace and presents opportunities for private investors.The M&A activity in the sector has picked up pace in recent times. Private players, both local and international, are attracted to segments such as the K-12 and higher education, which are the largest within the sector. Further, the new and promising industry-specific, niche sectors such as vocational training, finishing schools, child-skill enhancement, and e-learning are also receiving investor attention due to their growing demand”, saysMahboob Murshed, Managing Director, Alpen Capital

The GCC EducationIndustry Outlook

According to Alpen Capital, the total number of students in the GCC region is expected to grow at a 3% CAGR between 2013 and 2020 to reach 13.7 million.

The total number of schools is expected to rise at a 2.4% CAGR from 2013 to 2020, concurrent with the increasing number of students in the GCC.

Enrolment increase at private schools is expected at a 6.7% CAGR between 2013 and 2020, due to the quality of education they offer and the favorable demographics in the region. The contribution of the pre-primary segment to the total enrolments in the industry is expected to increase from 5.8% in 2013 to 7.4% in 2020. Also, the tertiary segment is likely to see a surge in its share of the total enrolments from 14.8% in 2013 to 16.5% in 2020. The primary and secondary segments are anticipated to drop their share to 76.0% in 2020 from 79.4% in 2013.

The UAE is the most developed education market in the region and is an emerging education hub. The Saudi Arabian market is the largest, accounting for more than 75% of the gross enrolment within the GCC. Both the nations account for relatively mature K-12 and tertiary education segments. Following these leaders are the Qatari and the Omani markets, which are growing, with support from planned education reforms. The education markets of Kuwait and Bahrain are growing at a modest pace.

Key growth drivers

By the end of 2014, the GCC population is expected to reach 50 million. The GCC region thus harbours a favourable combination of a rising population base and increasing number of expatriates in the region that is expected to result in an increase in the demand for education.

Based on purchasing power parity (PPP), the GDP per capita across the region is expected to rise at a 3.1% CAGR between 2012 and 2019. With rising GDP levels, the disposable income of the middle-class across the GCC is expected to surge, presenting the prospect of this segment of the society turning to the expensive, high-quality education of private schools. Enrolments at private institutions in the UAE accounted for 69% of the total enrolments in 2012, up from 39% in 2000. Higher enrolments at private institutions through the last decade indicate their rising popularity.

Governments are focusing on enhancing the quality and reach of education across the GCC. The member nations are acknowledging the importance of private participation in accomplishing their objectives for the education sector. The result has been an increasing number of private schools and colleges being set up in the region. On an average, the GCC region is expected to experience a recurring spend of about US$150 billion on its education sector in the next couple of years.The GCC Education market thus presents opportunities for new

Emirate:  Abu Dhabi

Date: Jul 3, 2014

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