UK STUDENT accommodation is now a top property investment choice for Malaysians, with the number of investors increasing even after the EU Referendum results, according to CSI Properties (Cornerstone International).
CSI Properties is a leading real estate consultancy that markets foreign property in Malaysia. It enjoys a strong reputation among Malaysians as the only firm with the most extensive portfolio of student property investment projects in cities across the UK, thanks to its strong connections with reputable and listed UK developers.
Its clientele ranges from purchasers of individual units (prices beginning at £50,000/RM272,609) to high net worth and institutional investors making en bloc purchases of £2M to £10M (RM10.9mil to RM59.44mil).
“Throughout 2016, we saw a significant increase in the number of Malaysian investors interested in UK student accommodation.
“Our sales volume increased 60% compared to 2015; more than half of which are from UK real estate – an indication that Malaysian investors are taking advantage of the current favourable exchange rate following Brexit.
“Additionally, more than 65% of our UK real estate sales came from UK student property alone,” said CSI Properties spokesman Virata Thaivasigamony.
“UK student accommodation has proven to be recession-proof, outperforming other traditional asset classes during the economic downturn. We see it staying resilient through Brexit because of the ongoing demand for UK higher education, in addition to the weaker pound being more attractive to overseas students.
“Students are not going to say they don’t want to study in Oxford University or the University of Manchester just because the UK is no longer part of the EU,” he added.
The UK student accommodation sector has grown by 37% since 2014, from £30.9bil to £42.5bil (RM168.5bil to RM231.7bil), making it one of the fastest growing asset classes in the UK property market.
Yet, supply is still unable to keep up with demand.
Knight Frank has predicted that UK’s purpose-built student accommodation sector is set to reach £45.8bil by September 2017 while rental growth of 2.5% is expected.
Realising the investment potential, Asian institutional investors like Mapletree Investments and GIC from Singapore have invested heftily in UK student property, with GIC’s most recent venture with Unite Plc in UK student housing costing the sovereign wealth fund a staggering £227mil (RM1.23mil).
The Universities and Colleges Admissions Service (UCAS) reports that the number of students for 2016/17 is set to exceed the previous year. While it may be that the weaker pound is more attractive to overseas students, it also proves the ongoing demand for UK higher education.
Research has also showed that at the start of the 2016/17 academic year, almost 522,000 students were enrolled on undergraduate courses at UK universities, an increase of over 7,000 on 2015 while the number of acceptances of EU students rose by 8% year-on-year.
Meanwhile, residential property in the UK has become more affordable with the sterling at one of its lowest levels since 1985.
Virata anticipates that investment volumes will recover once uncertainty reduces and the market rights itself around.
“Brexit has happened, but UK and London will remain an important landmark in Europe.
“The dust will eventually settle, people will adjust to the new ‘normal’ and the pound will rise again. But until then, there is a good window to invest in UK property, particularly in the regional cities like Manchester, Birmingham and the outer boroughs of London where there is Crossrail and high-speed rail accessibility,” said Virata.
CSI Properties will launch two brand new UK student accommodation projects in partnership with UK developers in Q1 of 2017.
For details, call 03-2162 2260.