Chinese landlords look to UK student housing

The projects that have attracted Chinese interest include a development inside the former headquarters of Provident Financial in Bradford, which will provide a home for hundreds of stu- dents.

According to FreshStart Living, the company behind the development, rising demand for student housing is leading to an influx of foreign investment in properties across the north.

The rush to invest in affordable accommodation in and around student centres such as Manchester, Liverpool, Bradford and Leeds is attracting landlords from as far afield as China.

FreshStart Living has welcomed a delegation of 13 Chinese investors who were looking to invest in student accommodation across the region.

Chief executive Charlie Cunningham said: “We are seeing very strong demand for student housing from investors, not just across the UK but globally.

“With any property investment, the key is to buy the property at a price which allows them to realise a decent return on rental income alone.

“With a lot of residential property, that means being able to let homes at slightly below the market rate to guarantee a long-term income.

“Because of the high demand for student housing at the moment, this approach is not strictly necessary and therefore a lot of student accommodation on the market is over-priced and won’t offer investors the longevity they are seeking.

“While demand is high now, it may not be in five or 10 years’ time, so investors still need to buy at a price which allows them to charge below-market rent in the long term.”

The Chinese investors were from Hong Kong and the Guangzhou region of China.

They were all looking to invest in student housing in West Yorkshire.

During their visit, they were shown investment opportunities in Bradford, where FreshStart Living is developing Colonnade House – the former Provident Financial HQ – which will have 223 city centre ‘student pods’.

The project is due to be completed in time for the new academic year, which begins next month.

Colonnade House has been disused since 2010, when Provident Financial moved to a new head office in Bradford city centre. Work started on the £6.9m scheme in January.

“We have turned an abandoned office building into something useful,’’ said Mr Cunningham.

Mr Cunningham said it had become easier for investors to get funds out of China in recent years.

He hoped members of the Chinese delegation would confirm their intention to invest in Colonnade House within the next few weeks.

He said that the foreign investors could take a maximum stake of 25 per cent in the develop- ment.

Mr Cunningham said that investors from Greece and Ireland had also expressed an interest in investing in Yorkshire since the crisis erupted in the euro- zone.

Both Ireland and Greece are struggling to cope with austerity measures.

British property is seen as a safe haven by many Greek and Irish investors.

Mr Cunningham added: “We can guarantee our investment properties for anything between two and 10 years, which is obviously very attractive to cash buyers looking for a safe re- turn.

“With many properties in London hugely over-priced, educated overseas investors are looking to the English regions for their investment opportunities.”

Mr Cunningham said FreshStart, which is based in Salford, aimed its accommodation at students who were on tight budgets and having to pay tuition fees.

Rooms in Colonnade House are available from £29,950 with rents from £75 per week

Mr Cunningham added: “We’ve sold about half so far. We’re confident of getting it pretty much fully let.”

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