The city of Liverpool (pictured) in the Northwest of England might be more famous for football and The Beatles, but it has also been attracting the attention of savvy Asian property buyers and investors.
The U.K.’s finance minister George Osborne highlighted the increasing amount of Chinese investment pouring into the city during his budget statement last week. He said the U.K. government is committed to vigorously encouraging the Chinese to invest in the Liverpool city area, where there are "exciting opportunities" for the "Asian tiger" to invest. Many of those investors have been looking at student accommodation.
Ray Withers, Chief Executive of leading property investment agency Property Frontiers which has successfully marketed nine student accommodation projects in Liverpool, told PropertyGuru: "While Chinese investor interest is currently growing in major regeneration projects in the Northwest of England, such as the Liverpool and Wirral Waters projects, the Liverpool student accommodation sector is attracting particular interest due to its affordable price point and double digit returns."
Given the large number of students from Asia who choose to study in the U.K, investors have an increasing pool of potential tenants looking for short-term accommodation while they study.
Withers added: "At present Chinese students make up the largest overseas student group in the U.K., contributing around £2 billion to the economy. Indeed, British universities are aiming to bring student numbers up to around 900,000 over the next 15 years, and a quarter of these will be coming from China’s growing middle classes with the hope of generating £11 billion a year in revenue. With education being of high importance in Chinese culture, and with Britain hosting some of the world’s best universities, Chinese investors are starting to make their mark."
To further highlight the value the Chinese place on a British education, a Hong Kong businessman made a £20 million (S$40.1 million) donation to King’s College London last week in the latest wave of contributions by Chinese philanthropists to U.K. universities.
Withers added: “It is clear that the Chinese place great value on our education system. With the government actively promoting the Liverpool region to China it is only a matter of time before the Chinese make the lucrative link between Liverpool and the student accommodation sector. The city is home to three top universities, and with the constant revamp in the city Chinese investors will be flocking in. We have already had interest in our student developments from the Chinese, and will be showing a group of investors from Singapore around our Liverpool student projects next month."
Liverpool presents the optimum buy-to-let environment for any investor, reaping significant returns from strong demand. The Knight Frank Student Property report 2012 identified that average rents for apartments and en-suite rooms in regions such as Liverpool rose by four percent, with total returns of around 10.5 percent last year.
One development which is likely to attract Asians looking to invest in student accommodation in Liverpool is The Paper Mill. It offers en-suite student rooms set within a refurbished building and is priced from £48,000 (S$96,000). Comprising 104 en-suite student rooms, The Paper Mill is located in the heart of Liverpool, adjacent to Liverpool One shopping centre. It offers investors a 10 percent net yield assured in year one.
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