Find out what’s happening in the property investment arena both in the UK and internationally
Asian investors make an educated choice and head to the US
November 24, 2015Article by Charlotte Ashton
According to Wealth X, one-in-ten Asian ultra high net worth individuals sends their offspring to the US for higher education. The trend has led to a rising interest in the purchase of US real estate by Asian investors looking to ensure their children can enjoy a high standard of living during their college years.
The US takes the lead
The UK has traditionally been a popular destination for Chinese investment but now, according to JLL’s quarterly Global Capital Flows data, the US has raced ahead as the Asian destination of choice for commercial real estate investment. Investors from China, Hong Kong and Taiwan bought US$28 billion worth of residential property in the US during the 2014/15 financial year, based on figures from the National Association of Realtors.
Ray Withers, CEO of specialist property investment company Property Frontiers, comments,
“We’ve seen an upsurge in interest from Asian investors looking to purchase real estate in the US and there’s a clear trend for properties suitable for student living such as our refurbished apartments in the Carolinas. Not only are investors interested in housing their own children studying in the US, but in picking up investment properties to house other students as well.”
Rising international student numbers
International student numbers are also increasing thanks to students coming to the US from Brazil, India and Latin America. In fact, the number of students coming to the US from overseas has jumped by 10% according to the Open Doors 2015 report from the Bureau of Educational and Cultural Affairs, representing the largest rate of growth for 35 years.
Yet it is Asian investors who appear to be the most excited about picking up real estate as well as an education for their offspring and their peers. In South Carolina, Chandler Oaks is one property development that is drawing interest from overseas investors. Just over a mile from Limestone College, the fully refurbished apartments have a tenancy agreement with the college to put tenants in place up to May 2019, with a waiting list of students queued up to move in.
Thanks to the contracted income with Limestone College, Chandler Oaks enjoys a minimum of 11.4% gross yield, with 8% NET underwritten income to January 2020. With investment from just US$48,671, demand has understandably been high, with 65% of apartments already sold.