For Immediate Release
Silver Lining Behind Brexit for Malaysian Investors
European Referendum holds many advantages for Malaysian investors
Investors of UK property can take comfort that there is a silver lining behind the impending European Referendum.
In the weeks leading up to Brexit, investors have been waiting with bated breath to see the outcome of the referendum on the UK economic and investments market should Britain exit the European Union (EU). Negative speculation has been rife with investors taking a wait and see approach, resulting in subdued demand in the property market especially in London.
For CSI Prop spokesperson Virata Thaivasigamony, however, Brexit offers a number of advantages to investors.
“True, the market has been subdued because of uncertainty leading up to the referendum. However, the Brexit uncertainty presents great buying opportunities especially for buyers from countries with weak exchange rates, for example, Malaysia. In this short term, there are amazing gains for investors as the weaker pound has worked to our advantage,” he said, adding that Britain has always enjoyed a strong and stable economy while London has been a leading global financial centre even before the EU was formed.
Cornerstone International is a leading real estate consultancy marketing foreign real estate to Malaysian investors. The company is based in Kuala Lumpur.
Research by JLL has revealed that some 58% of investors were on the hunt for opportunistic investments, with a number of Asia-based investors looking to capitalize on the weaker pound and slower property market.
While acknowledging that London will take a hit in the event of a Brexit, Virata is confident that the UK will regain its economic and political strength in due course.
“If Brexit occurs, there will be a period of uncertainty and the pound will take a beating. As a result, the UK will be ‘on sale’. Again this is advantageous to investors, particularly those investing in UK student property because UK education will remain strong regardless of Brexit. Malaysians and other foreigners including those from the EU will not stop sending their children to study in the UK – people still want a degree from a UK university,” he added.
The UK’s university system is oversubscribed with 7.3 applications from overseas for each EU student accepted in 2015 and 7.9 for each place accepted by a non-EU student. With demand in purpose built student accommodation superseding supply, the student accommodation market will be more resilient to Brexit than other commercial property even as the demand for UK education remains unabated.
A JLL survey had revealed that a significant number of UK investors remained confident of the student accommodation sector.
“Eventually the uncertainty from Britain’s exit will level off as London makes its own treaties with other countries. London will get back on its feet, and the pound will strengthen again, offering great returns to savvy investors who had taken advantage of the weaker pound. Irrespective of what happens on June 23rd, UK will remain a safe haven for investors,” said Virata, adding that UK is facing a general undersupply in housing.
Conversely, Virata foresees a rapid strengthening of the British currency if Britain chooses to remain in the EU, again benefiting savvy investors who had chosen to take advantage of the weaker pound.
Malaysia is the third largest investor to the UK and Australia property markets in 2014 and 2015, with Singapore and China in first and second place, respectively.
CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and purpose-built student property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts and due diligence.
Disclaimer: CSI Prop does not provide tax & legal advice and accepts no liability. Readers are encouraged to consult a qualified tax or legal advisor for a thorough review.
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