Student accommodation offers investment opportunities

  • News
  • Monday, 04 May 2015

Comfortable setting: Communal spaces such as study and recreation areas are some of the important features of a student property in the UK.

PROPERTY investors in Malaysia are seeing greater investment opportunities in UK student accommodation.

Though still relatively new in Malaysia, more investors are beginning to see the growing viability in student accommodation as an investment compared to traditional rental property investments.

This is evident in the increasing number of UK student property investment opportunities offered by Malaysian real estate companies in recent times.

In the UK, student accommodation is now the strongest asset class, outperforming other property types since 2011, according to property consultancy Knight Frank’s Student Property Index 2014. The index shows the attraction of student accommodation, driven by an acute structural undersupply and positive rental growth, has proven resilient even during the economic downturn.

“Student property, once the domain of institutional investors, is the fastest developing property sector with a global worth of £200bil (RM1.1tril).

“The British education remains highly regarded, globally. With the British government’s abolishment of the cap on university student numbers this year, there will be an influx of students, resulting in a continual uptrend in demand for proper accommodation,” said Cornerstone International Properties senior relationship manager Darren Tan.

Tan said among the attractive features of student accommodation investment, aside from great demand and low supply, was its high yields and low risk.

Developments from strong and credible developers in the UK offer a yield of up to 10%. Rentals are continuous, while bad debts are rare as parents stand as guarantors to students renting the units.

“Malaysians are generally still unfamiliar with UK student-property investment, but this trend is changing. Of late, more local real estate agencies are starting to jump on the bandwagon, as they realise the huge potential this asset class holds,” Tan said, adding that Cornerstone International sold out 70% of their stock within four weeks of a launch, despite the general unfamiliarity of the asset among locals.

Cornerstone International is among the pioneer international real estate agencies in Malaysia to champion investments in UK student accommodation, with investment opportunities in cities across the UK.

Cornerstone International also assists parents looking for rental accommodation for their children who are studying in the UK.

Typically, purpose built student accommodations are available as fully furnished ensuite clusters or studio units with features such as cleaning and laundry services, high-speed WiFi availability in rooms, recreation and sports facilities, 24-hour security and maintenance.

Cornerstone International holds periodic UK student property expos at their events in Kuala Lumpur, and Penang. Coming events will take place from 10.30am to 7pm at Cornerstone IPC, North Block, Wisma Selangor Dredging, Jalan Ampang, on May 9; and One World Hotel, Bandar Utama, PJ on May 10.

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