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Why GCC Investors Should Look To The UK

Why GCC Investors Should Look To The UK

Adam Price, managing director of Select Property Middle East, explains why savvy investors from the Gulf should take advantage of the British student property market.

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The UK is attracting a lot of global attention at the moment and overseas investment is steadily rising across all markets. UK real estate has always been regarded as a secure investment type and there has been heavy spending over the last few years with buyers favouring property over other assets. It was reported by Deloitte that more than Dhs124 billion (£20 billion) was spent by foreign buyers in the British property sector in 2012.

A property type which has fared particularly well is student buy-to-let, with global property consultancy Knight Frank stating that ‘total returns in the sector have outperformed all other traditional asset classes’ in the UK and that this has been the case since 2011. It is predicted that this will continue well into 2014 thanks to a maturing market and increasing student demand.

This demand has been created by a number of factors – a shortage of suitable accommodation, a natural decrease of the old housing stock and the movement of students away from traditional shared houses.

Student numbers in the UK are also being boosted by the growing number of international students flocking to the country. Knight Frank has predicted that these numbers will rise by four per cent in the upcoming academic year, and the government has stated that they will continue to encourage this growth.

Within the student real estate category, purpose-built accommodation developments provide the highest returns. Purpose-built student property varies widely, from cluster rooms with shared kitchens to premium studios with private amenities and additional leisure facilities. Although more expensive to rent, these high-end developments are becoming more in-demand as students increasingly look for accommodation that will both support their studies and aid social interaction.

So what factors should you look-out for when considering student property?

1. Location –  Anything other than city centre is not worth your time as students care about a convenient location above all else.

2. Quality –  Today’s students want quality and security and they are willing to pay a premium for it, generating you higher yields in return.

3. Lifestyle – You need a student service provider which is going to provide its tenants with the best possible experience.

4. Price – A cheaper product may save you money in the short-term but it won’t be as popular with students, which jeopardises your stable income in the long-run.

An example of an accommodation provider that meets all these points is Vita Student and its products represent the very finest student residences on the market. Its developments aren’t located in London, but rather in established university cities such as Manchester, Exeter and Sheffield where there is a high density of students and a huge shortage of suitable accommodation.

This type of high-end student property is likely to generate a steady income of around 35 per cent over five years (seven per cent per annum) – a much higher figure than you are likely to receive in the capital or indeed in the traditional property sector in general. The latest Vita Student development in Sheffield also offers investors a predicted six per cent capital appreciation per year.

These developments are also ideal for international investors as they are fully-managed so all you have to do is make the initial purchase and then sit back and watch your money work for you.

With confidence in the market soaring and student properties flying off the shelves, investors from the Middle East need to ensure they aren’t missing out on the opportunity to benefit from this exciting, young sector.

For more information, contact Select Property in Dubai – [email protected]

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