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Investment Opportunities in UK’s Youngest Cities

A younger population can bring advantages such as attracting businesses, which will have a larger pool of working age residents to draw from.

While recent data by the Office for National Statistics (ONS) show that the UK is facing an aging population, key cities remain a hub for the young. What difference does the age of a city make?

With its beautiful, calming scenery and rich history and culture, the UK is home not just to the native Brit, but also millions of immigrants.

Over the past 20 years, younger people have increasingly chosen to live in the urban areas of the UK, while the share of older residents has fallen. Statistics show that the UK’s edgy and lively cities remain a favourite among the younger generation with 62% of people aged 18 – 34 living in cities in 2016 compared to 58% in 1996. In contrast, the share of people aged 65 or older fell from 51% to 46% during this period.

A recently released study by the Centre for Cities reveals some of the youngest cities in the UK, with  Slough as the clear winner at the youngest average age of 33.9. London, popularly assumed as the city with the youngest population, comes in at sixth place, with the average youngest age of 36.5. Here is a list of some of the youngest cities in the UK, with average ages of under 40:

Oxford   34.4
Luton   35.1
Cambridge   35.4
London   36.5
Bradford   36.7
Birmingham   37.6
Bristol   37.7
Manchester   37.8
Reading   37.8
Liverpool   38.2
Plymouth   39.4

Investment opportunities  

What draws the younger population to these cities? Job opportunities and expansion, good infrastructure, facilities and educational institutions — these are the essential pull factors. On the other hand, a younger population can bring advantages such as attracting businesses, which will have a larger pool of working age residents to draw from.

Among the cities which have been getting younger, Oxford, Cambridge and Brighton have large shares of high-skilled, high-paying jobs, and all offer good access to quality schools.

Manchester, the UK’s fastest-growing city, is Europe’s second largest creative tech hub with 70,000 people now working in the city’s creative, digital and tech industries. Like Liverpool, it is also home to some of the world’s leading universities, offering a huge cache of thinkers to future employers.

It is in cities like these that purpose-built student accommodation are at high demand, offering commercial property investors opportunities to grow their wealth in this high-yielding and unique sector. 

In Bristol, for example, the number of students needing accommodation is projected to grow to 44,000 by the 2018/19 academic year. The growth can be attributed to the city’s two notable universities, the University of Bristol and the University of West of England, which make up a total of 40,000 full-time students. Little wonder that student property is a top investment in Bristol.

Meanwhile, Liverpool’s £2bn vision to develop a world-class Knowledge Quarter will further reinforce its status as one of the best student cities in the world. The Knowledge Quarter represents an opportunity for significant future investment and regeneration, and will ultimately create more high-skilled jobs in the city. By attracting investment and creating jobs, people’s lives are improved and opportunities are created, thus attracting a greater number of young settlers and driving housing demand. 

Private Finance and Savills have now placed Liverpool and the overall Northwest as the top hotspots for buy-to-let investors with some of the highest comparative returns.  Does this pique your interest to grow your wealth in cities with a youthful population? Speak to us and find out more. Or send us a comment below!

Next week, we talk about cities with an ageing population and the opportunities they hold. Stay tuned.

Source:

http://www.bbc.com/news/uk-43316697

csiprop.com/the-top-investment-in-bristol/

csiprop.com/liverpools-knowledge-quarter-world-class-innovation-district/

csiprop.com/uk-property-outlook-2018/

csiprop.com/manchester-original-modern-city/

 

By Marzatul Ruslan

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). 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.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260

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UK Commercial Property Investment Rose 66%

Natex, a new-build student property investment located strategically in the Liverpool city centre, is a commercial property investment with 9% returns p.a. with 5 years assurance.

Unlike residential property investors, commercial property investors benefit from certain tax exemptions (T&C apply), allowing for higher returns on investment.

According to prominent research outfit Savills, investments in UK commercial property has risen 66% to £4.2 billion in February 2018 compared with the same month last year.

Savills states in its February Market in Minutes report that despite economic pressures from Brexit, investor appetite for UK property remains strong. In 2017, total investment into UK real estate reached £65.4 billion, representing a 26% increase on 2016’s annual total.

Unlike residential property investors, commercial property investors benefit from certain tax exemptions (T&C apply), allowing for higher returns on investment.

CEO of Savills UK and Europe, Mark Ridley, commented: “January’s volumes demonstrate that investors are still looking beyond Brexit and are happy to commit to the UK to secure prime property with secure income characteristics. Based upon current projections, driven by a downward shift in equivalent yields, we expect total returns for average UK commercial property to be around 7% this year.”

In its latest report, the Investment Property Forum (IPF) said the outlook for 2018 has improved over the three months since its last survey was conducted, with average rental and capital value growth rates increasing in virtually all sectors.

Its UK Consensus Forecasts report, which surveyed 23 property consultants and fund and investment management houses, showed that the rental value growth average forecast had risen to 0.8% from 0.4% three months ago.

Student property sector stays robust

Student property, as a subset of the commercial property sector, remains a popular investment, boasting a low requirement of capital but yielding high returns.

According to CBRE’s student accommodation index, between 2012 and 2016, annualised returns for the sector totalled an impressive 11.8%. This can be compared to the residential sector at a still respectable, but lower 7.8%, and commercial property as a whole, at 7.4%.

Places at UK’s higher education institutions remain in demand worldwide. EU and non-EU students are the fastest-growing segment, bringing a net benefit of £2.3 billion per annum to London’s economy supporting 60,000 jobs in the capital.

In 2015-16, there were almost half a million non-EU students in the UK, about one-fifth (19.2%) of the 2.3 million total. In the 2017/18 academic year, non-EU applications had risen by 2.2% even while EU applications had fallen ostensibly due to Brexit.

To date, there is a total of 1.7 million full time students in the UK. Of this number, 23% are foreign, bringing the growth of international students in the UK to a whopping 70% from 2006 to 2016.

23% of the 1.7 million fulltime students in UK are foreign. Above, HESA charts the largest international student nationalities in the UK over the past decade (Cushman & Wakefield).

The Government’s recent removal of the student cap will provide more spaces for the large number of foreign students applying to study in the UK, increasing demand for quality student accommodation.

New-build student developments like Natex in Liverpool and Bristol City House in Bristol continue to provide opportunities for the savvy investor thanks to their strategic location in the city centre and proximity to top universities.

UK care homes: fast-growing segment in commercial property sector

Care homes are another fast-growing segment of the commercial property sector. The UK is facing an aging population, with the threat of dementia becoming increasingly prevalent among the elderly. Patients suffering from dementia require specialized care, and living at a care home can ensure they have the best possible quality of life.

Julian Evans, Knight Frank’s Head of Healthcare said that the UK care homes market faces an imminent crisis due to a national shortage of beds. However, this crisis and acute undersupply of care homes has created opportunities for investors, and will continue to drive investor appetite in the coming years.

“The disparity of care bed supply and demand presents increasing opportunities for investors, and, combined with the fall in the sterling, has generated a truly global appetite for the sector.”

Research by ONS revealed that 1 in 4 people will be aged 65 years old in less than 30 years. Alzheimer’s Research states that 850,000 people live with dementia in the UK today. This figure is expected to balloon to two million by 2050. However, the supply of beds at care homes in the UK are not enough to meet this burgeoning demand.

Care home investments can offer up to 8% net-yield per annum for up to 25 years, as well as provide an exit clause or contractual buyback.

Got questions? If you’re interested in investing in UK commercial property, send us a comment or message below and we will get in touch with you!

Sources:

http://www.savills.co.uk/_news/article/72418/228196-0/2/2018/savills–uk-investment-rose-66–y-o-y-in-january

www.buyassociation.co.uk/2018/02/20/purpose-built-student-blocks-can-provide-healthy-returns-investors/

https://realassets.ipe.com/news/uks-2018-commercial-property-outlook-improves/10023400.article

http://www.ipf.org.uk/resourceLibrary/investment-property-forum-uk-consensus-forecasts–winter-2017-18–full-report.html

https://www.propertyfundsworld.com/2017/03/07/249343/crisis-uk-care-home-sector-provides-opportunities-developers-and-investors-says-kn

csiprop.com/the-top-investment-in-bristol/

csiprop.com/care-homes-investment-stand-asset-class/

UK Student Accommodation Report 2017/18, Cushman & Wakefield

By Ian Choong

CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential and commercial property including student accommodation and carehomes, in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc) and Australia (Melbourne, Perth, Brisbane). 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.

Need advice or clarification? Call us for more information and/or to find out about our projects! Hotline: 03-2162 2260