Liverpool Student Property: A Foreign Investor Magnet

When investing in UK commercial student property, one should consider investing in Liverpool. Liverpool is a top student city in the UK with a student catchment of more than 50,000 .

UK commercial student property is a bit like treasure; it’s a valuable asset and savvy investors are constantly searching for the X on the map. While the increasing number of local and foreign PBSA investors should be indication enough of the great opportunities in this sector, one would ultimately solidify this belief once exposed to the promising data behind this jewel of a sector.

Foreign Investors Flock Towards Commercial Student Property 

Many local investors have already hopped onto the student property bandwagon, and while that may be expected, the rising number of foreign investors is a little less so. What makes commercial student property investment so popular among both local and foreign investors alike, is because it is a hands-off property investment: commercial student properties are fully-managed by professional property managers,  allowing investors to commit to the venture in the student sector from the comfort of their home countries!

With the UK’s nonpareil education system ensuring continuous demand for PBSA that consistently outweighs supply, overseas investors in search of investments other than residential property will most likely find themselves in the student property sector.

Liverpool Is The Best Student City

While many urban cities in the UK boast reputable universities — it is the UK after all, and lists such as The Times Higher Education World University Rankings and QS World University Rankings prove British educational institutions continue to dominate the educational sector — none of them stand out quite like Liverpool.

A combination of pull factors place Liverpool at the forefront of UK student property investment; alongside affordable prices and excellent rental yields, a unique lifestyle experience continues to attract both local and international students.

Students are initially attracted to the high level of distinction associated with the top three universities in the city: University of Liverpool, Liverpool John Moores University (LJMU) and Liverpool Hope University. The redbrick University of Liverpool is ranked in the top 1% of education institutions in the world whilst Liverpool John Moores University and Liverpool Hope University also rank within the top 75 according to league tables by The Complete University Guide.

The other factors that ultimately mark Liverpool as the best student city is its eccentric culture. Students are enticed by the abandoned warehouse nightlife of the Baltic Triangle, the galleries and museums of the Albert Dock and the unconventional cafés on RopeWalks’ famous Bold Street.

A mesmerising cafe in the Baltic Triangle offers residents an interesting experience Image from:
A mesmerising cafe in the Baltic Triangle offers residents an interesting experience

A City for Investors

Liverpool boasts a large student population of over 70,000, which guarantees an abundance of tenants searching for the right accommodation. With most of the top student property developments marking the best student areas near Liverpool’s city centre attractions and university campuses, investors can enjoy choosing from an already promising selection without going through all the trouble.

Adding to Liverpool’s prestige is the Knowledge Quarter, a £2bn regeneration scheme that will lead the city to becoming one of the world’s leading innovation districts, further reinforcing its relevance in this modern digital era!

What every international investor is particularly attracted to is the excellent rental yields — up to 8% nett returns is commonplace in Liverpool’s student property sector! Considering low initial average property costs that provide opportunity for maximum capital appreciation over time, investors would be hard-pressed to find a greater deal.

Interesting in investing in Liverpool PBSA?

There are many commercial student accommodation developments in the pipeline. Natex, one of Liverpool’s latest to date, offers investors 9% returns, assured for five years. The 566-unit student accommodation scheme is approximately a 5-minute walk from University of Liverpool and Liverpool John Moores University — it boasts all the facilities a student would ever need (and more!).

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Investors Should Leverage On High Demand for Student Property

VITA Student, a student accommodation brand in the UK.
VITA Student, a student accommodation brand in the UK.

The UK has long settled comfortably on the top spot of global education. This has been reflected by growing demand for Purpose-built Student Accommodation (PBSA) or UK Commercial Student Property as students from all over the world flood into the UK in seek of highly revered credentials. Across the UK as a whole, full-time student numbers continue to outweigh current PBSA bed spaces by 3:1, despite the pipeline of student accommodation either planned or underway.

Unlike residential property, this sector is seen to be a concrete investment even in the face of global and domestic challenges. Recent data reveals the popularity of PBSA among investors following the undersupply.

Savills reported a 17%  increase in student accommodation investment in the UK this year, and expects investments in the sector  to reach £5.3bn by the end of 2017, surpassing the £4.5bn spent in 2016. Meanwhile, Knight Frank’s UK Student Housing Rental Update reports that headline rental growth for the sector increased by 2.55% for the 2017/18 academic year.  Becoming a private investor in student property is currently trending in the UK, with reports revealing lucrative returns from the PBSA sector for individual investors.

While some of the younger UK population prefer to seek apprenticeships instead of applying for university, the latest analysis by the Universities and Colleges Admissions Service (UCAS) shows that demand for higher education among 18-year-olds remain strong, increasing by 0.4% in 2017 from the previous year. Additionally, the number of applicants from the EU increased by 3.4% to 43,510, a 3% rise from the same point in 2017 and the second highest number recorded. The number of international applicants increased to its highest ever number, by 11 per cent to 58,450.

The act of supplying student accommodation that is both sufficient in number and quality was once under the responsibility of educational institutions themselves, but in recent years, have mostly been provided by private investors and developers. What has been particularly demanded from students are superior quality accommodation which they are prepared to pay higher rents for. This makes the sector very profitable for landlords and letting agents.

David Feeney, Head of Student Analytics at Cushman & Wakefield said: “More students than ever are demanding a bed in purpose-built accommodation. This, coupled with pressure on local housing markets, means that demand for purpose-built accommodation should remain strong. However, micro-market knowledge is essential to investment success.”

Mike Mitchell, Partner in Cushman & Wakefield’s Student and Residential Investment team, commented: “Across the UK, the PBSA market continues to be one of the most attractive asset classes in real estate for investors. Despite applications to Universities falling by 3.7%, the sector has witnessed year-on-year rental growth. Due to the value of foreign currencies against the Pound, there has been an influx of capital from overseas buyers in 2017 who are now competing with UK purchasers.”

What can be taken away, at the end of the day, is that PBSA in the UK is big business. One fact reinforces this already proven notion, and that is the fact that the UK overtook the US as the largest student property market for the first time in 2015 after reaching a record £6.56bn in investment volumes. — to invest in PBSA in the UK seems to be a pretty solid plan!

The Hitchhiker’s Guide To Property Investment

The world of investment, much like a candy stall, has a wide variety of selections. From unit trust to the stock market, to land, and all the way to agarwood, it seems like you can invest in pretty much everything. Whether you consider yourself illiterate in anything related to investment or believe yourself to be quite the opposite, stability and low risk are the words you most likely inherently trust, which is the case in property investment- places with high population growth and is strategic in its location are most likely to bring the best returns.

Where the stock market can become as unpredictable as radioactive substances, property investment is as steady as investment can get. Where unit trust is a form of investment that is not tangible and agarwood investment is not exactly subject to the most positive conditions, property investment gives you satisfying returns.

With a burgeoning human population comes the burgeoning need for sustenance and industry. This, in turn, pushes the need for jobs, schools and tertiary education institutions which are all inevitably related to an increase in the demand of housing spaces. With that in mind, the decision to purchase property to put up for rent can be a sure-fire way of receiving satisfying income.

Property investment stands on a pretty steady pedestal, allowing for a smooth transition towards the next step: where and what to invest in. Buying locally for investment is not quite an option – at least not in Malaysia, Hong Kong and Singapore – what with the respective federal government’s strict housing regulations, and property prices skyrocketing at an absurd pace and altitude. The right step to take would be to invest in overseas property. Locations where jobs, industries and higher learning institutions flourish as well as where the local authoritative figures make an effort to better the vicinity are ideal when it comes to pinpointing exactly where to invest your money.

Listed below are some pointers that will keep you on the right track: 

1. Follow The Money

An important point invariably deserves a repeat: where jobs, industries, higher learning institutions, and active locality improvement blooms is where you would like to invest in some rooms.

2. Leave the past in the past

It is common to doubt the success of new or previously criticized areas. This does not, however, make such places immune to improvement. There are many examples around us already — Pasir Ris and Jurong in Singapore, as well as Sentul and Brickfields in Kuala Lumpur. The most noteworthy example of a successful revamp is the one that happened to Bangsar. Believe it or not, Bangsar used to be rat-infested, water-logged and prone to floods. It is now one of the most expensive places in KL.

It would be a good idea to look at the progress of your location of interest. Specifically, on the expansion of the area, the improvement occurring or are set to occur and the developers that are zooming in on the place.

3. Buy the type of property that is most “lettable”

In certain places, two-bedroom houses and flats appeal to the widest range of potential tenants. Large family homes are not recommended.

4. Don’t be restricted to your own immediate area / expensive areas only

Expensive areas do not necessarily garner good rental prices. Property located further away may cost less but may still fetch good rental yields.

5. Ensure the locale is a thriving one for tenants

Places that boast convenience such as having supermarkets, universities and amenities nearby will be the highest in demand.

6. A letting agency is a good thing

Read up on your property of interest for additional security then allow your property to be taken care of by a letting agency.

7. Check out the developer

Like all that is new, newer developers are subject to more doubt than its well-documented seniors; many would argue the latter is a wiser choice. However, joint venture partners, financials and choices of location are definitely worth paying attention to when it comes to understanding what your new developer has to offer.