Nearly three quarters of Malaysian property investors are considering investment in the UK’s student accommodation asset class according to Cornerstone.
The Malaysian property agent found that, of the investors looking to invest their money in property abroad, 73% had chosen to invest in student properties in the UK, citing an attractive rental return available within these projects as the main reason behind the trend.
The growth within the student accommodation market since the economic downturn of 2008 has seen increased investment activity in the UK, attracting buyers from around the world and transforming the market into the fastest growing property asset class in the UK.
Data from solicitors Addleshaw Goddard found that more than £6 billion was invested in the student accommodation market in 2015, increasing six-fold from the £1 billion achieved by transactions in 2010 according to Savills.
Cornerstone’s director, Virata Thaivasigamony highlighted that there was ‘very little new stock’ entering the UK market in spite of its popularity amongst investors. He stressed that there is a ‘structural undersupply’ in the student accommodation market, a shortage that is being perpetuated by growing student numbers in the UK. This follows the removal of government restrictions on the number of students permitted to enrol at universities, which were lifted in September 2015.
Mr Thaivasigamony said, ‘People want to go to the UK… There’s about 16,000 students, Malaysian students, studying in the UK right now and there’s an additional 58,000 in local universities … [who]may go there in their last year or second last year.’
The continued investment relationship between Malaysia and UK property has seen the market described as a ‘safe haven’ by Cornerstone. UK property sales from Malaysia are still dominated by residential property sales, but the growth of the student accommodation market has seen its popularity increase amongst Malaysian investors in search of a more generous rental return.