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Education: Top incentives for China Investors to invest in UK property market 2019

Education is extremely important in Chinese culture. For Chinese people, it’s the number one key to achieving success. Education has now become the top incentive in China to invest in the UK property market, according to a recent report from global B2B property sales platform. UK properties for students have performed exceptionally well as an asset class compared to traditional investment.

Liam Bailey, global head of research from Knight Frank, said: “Our analysis shows just how important the standard of top London schools is to wealthy international individuals, and the demand this contributes to the London property market.”

He also mentioned about the majority of overseas buyers appear unconcerned by the impact that Brexit may have on the UK as a place to educate their children and there have even been signs that it has become more attractive to some in the past 12 months.

A rise in applications from international students

1 – Increasing numbers of student enrolment have increased by 50% compared with a decade ago, is supported by UK high university rankings, high standards of living and higher growing overseas demands, mostly from China.

Purpose-built student accommodation (PBSA)

2 – Overseas students have a high tendency to choose purpose-built student accommodation in the UK, based on the security, location and facilities. Many developers tried their best to equip and support the requirements of international students.

Chinese parents like buying properties near central London

3 – Most Asian parents were attracted to the PBSA building because of its location “in the very heart of London” and the high level of security, including a 24-hour concierge, key card entry and security cameras in every accommodation.

PBSA developers focused on good quality accommodation to support student wellbeing

4 – In the short-term, many of the largest development opportunities will be in partnership with universities to redevelop older stock. This new generation of PBSA will be driven by quality, value for money and delivering student experience.

See the risen value of UK properties in the long term time period

5 – Many Asian parents see the potential 10-year span of education for children that come over at secondary school age, therefore they started looking at a long-term commitment as opposed to short-term investment.

Outbound investment from the Asia Pacific

6 – According to the research of Knight Frank, most of the education demand is from buyers from China and Hong Kong, followed by those from Singapore, India and Russia.

One of the safest, affordable overseas investment

7 – For institutional capital in Asia, PBSA in the UK represents a stable and recurring income which delivers attractive returns relative to traditional global assets classes.

Brexit: what does the future hold?

There is no doubt that education is a big motivator for property investment among Chinese investors. These numbers are expected to be maintained, or even rise, in the future. Data from UCAS show a 6% year-on-year increase in the number of applications from international students for the 2019/20 academic year.

Alongside the uncertainty surrounding the outcomes of Brexit, the university sector is facing  number of challenges. However, these investors are not emotional, they care about bargain, at the same time they have long-term faith in the UK.

Hotspots

UKLEJU has chosen five properties attracting international students and explained why these cities remain attractive to overseas investors.

Quinton Court in London, developed by The Berkeley Group

London is home to more universities than any other city in the world. Its popularity with students sees it regularly as one of the best cities to study. Demand for accommodation outstrips supply by a considerable margin, whilst new development is constrained by viability.

Quinton Court provides a unique opportunity to own a high-quality residence in one of London’s finest neighbourhoods, Sevenoaks. Sevenoaks provide an incredible range of educational opportunities, such as the well-known Prestigious Sevenoaks School, founded in 1432. This school won the “The Sunday Times Independent Secondary School of the Year 2018”, offered day and boarding to boys and girls aged 11-18 on a magnificent 100-acre campus.

Crossbank in Manchester, developed by Heatley Development

Manchester is home to two of the largest universities in the UK, University of Manchester and University of Salford. Manchester has successfully attracted multinational companies to relocate or expand their presence in the city. The Media City, Amazon, Booking.com and TalkTalk committed to nearly a million square feet of office space in Manchester, proving Manchester as an investment hotspot.

Within walking distance from Salford University and direct public transport links to Manchester City centre in under 10minutes, Crossbank ideally positioned to cater to the city’s large population of students and young professionals. Crossbank offers the students an attractive alternative to student halls or house shares.

Timber Yard in Birmingham, developed by Galliard Homes

Birmingham is the UK’s largest centre of higher education outside of London and home to five universities, two of which rank among the top 100 in the QS World University Rankings. The most prolific, Birmingham University, Birmingham City University and Aston University, all lie within a 10-minute drive of Timber Yard, together with numerous schools and colleges providing education for all ages.

1 Penta House in Liverpool, developed by Aronex Development

Liverpool is a world-renowned destination and cultural hub, its economy continues to grow at pace, driven by its creative and digital economy.

Almost 12% of Liverpool’s total population is made up of students (53,000), with students from over 100 countries attending higher educational institutions in the city. 1 Penta House is fully furnished with a variety of price ranges to meet all budgets and is nearby many leading institutions including the University of Liverpool, Liverpool John Moores University, Liverpool Hope University and The Liverpool University of Performing Arts

Leicester 47 in Leicester, developed by Aronex Development

Ideally positioned in the heart of Leicester City Centre, Leicester 47 is purpose-built student accommodation. This development is one of the safest, affordable investment opportunity, boasting 7% NET return for five years, only 20 minutes from De Montfort University.

Whereas the UK and continental Europe for years have been very attractive student destinations, and so rental markets are rising. Rising household income makes Chinese parents start thinking about the value of money that they put into the education of their children, therefore it is no surprise to see that Chinese parents are now actually starting to invest in UK properties.

UK student property is yet to attract a significant volume of capital from Asia. It is our view that Asian capital will play a more significant role in the future for the UK property market.

 

 

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