eduProperty consultant predicts educational hubs will shift to Asia after 2020 creating new townships and new demand for property.

Screen Shot 2016-05-07 at 2.06.17 PMOne of the fastest ways to build population is to build medical and tourism facilities but building good schools or higher institution facilities is catching up as a sure-fire way to attract population growth. “Not only do these schools attract people with school-going children, they also produce jobs and attract migration from other states. And the best thing is this population is more stable and less transient than that of a township based solely on tourism activities,” says Dato’ Sri Gavin Tee, a property consultant. “When the place becomes vibrant, this would drive the demand for properties particularly near the good schools.”

“A good example is Malaysia where developers have shrewdly built Chinese schools within their developments. As there is a quota to get into good Chinese schools resulting in short supply, inevitably, the population will move in,” says Tee who is also President of Swhengtee International Group.[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5″ ihc_mb_template=”1″ ]

Screen Shot 2016-05-07 at 2.06.14 PMKL See, Director of Metro Homes Real Estate Agency agrees, saying that he has a friend who moved his entire family to Subang just so he could send his children to a renowned Chinese school located there.

Taking that concept further, building international standard schools and/or international colleges and universities wil likewise attract both local and foreign population. And as is the case in developed countries such as Australia, the UK and US, the parents will sometimes buy properties near the colleges for their children to stay. Hence, such schools help internationalise the community, while at the same time raising the demand for property in the area. “The multiple effects from good schools are many; and Malaysia has an abundance of such cases where the schools form the core of the community which continues to experience growth as the school and its supporting industries expand,” Tee elaborates.

Examples that immediately come to mind is EduCity, the premier cluster of international schools, colleges and universities in the Iskandar region (southern Johor) that is attracting students from all over the world especially from Singapore. In a surprising turn of events, Singaporean students are crossing over the causeway in the hundreds to study in EduCity instead of the opposite when Malaysians used to send their children to Singapore for its better educational standard.

“With the AEC (ASEAN Economic Community) coming into being, competition for investments and tourist dollars will intensify among the 10 ASEAN countries. International learning institutions can be an added avenue to attract talents (both faculty and students) and with it, inbound investments,” Tee notes.

Globalised environment

Indeed, foreign institutions of higher learning especially universities have collaborated with Malaysian colleges and universities as far back as the 1980s when the latter offered twinning programmes and pre-university courses. The programmes allow students to study the first one or two years locally to save costs and then finish off the final year in the UK, Australia or US main campus.

These twinning programmes which are based in Malaysia now span almost every specialised subject and have attracted students from around the world including China, Indonesia, Middle East, India and Africa.

Screen Shot 2016-05-07 at 2.06.14 PM 2Clearly, international schools have proven to be a major globalising tool not to mention being an industry that foreign universities want to participate in. There are also the soft benefits of cultural and intellectual exchanges which contribute overall to a globalised environment.

APR12_28-29 copyThe most recent instance of an elite foreign university launching its branch campus in Malaysia is Xiamen University, one of the top 30 universities in China. The launch follows countless other premier schools and universities that have physically set foot in Malaysia such as Nottingham University in Semenyih in Selangor, and Newcastle University Medicine Malaysia, Netherlands Maritime Institute of Technology and University of Reading in EduCity.

These universities especially those that have chosen off the beaten track locations such as Semenyih, Nilai and even Pagoh have turned these once sleepy towns into international townships. Building an international school or university has now become a much sought after activity by developers and educational institutions alike much like how shopping malls once used to be.

Tee, who is also an international property speaker forecasts that the trend of foreign universities including elite ones “bringing the school to the doorstep of the students” is becoming fashionable in Asia and will reach a bigger momentum beyond 2020. “Educational hubs will move to Asia where the majority of the foreign students come from.”

“Bringing the school to the doorstep of the students in Asia is the coming trend. Already, you can see this with a number of British, American and Australian universities and private international schools opening up across key cities in Asia such as Kuala Lumpur, Iskandar region, Bangkok, China and Vietnam.”

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Giving some background, Tee reminisces that during the 80s – 90s, the best education hubs were located in the UK, US and Australia, and droves of foreign students especially from Asia converged there to further their education. When their currency fell however during the Asian Financial Crisis (1997 – 98), much fewer students went as those countries became too expensive. Partly deprived of the lucrative overseas student fees, the universities decided to set up where the student population was biggest; for example, in the case of University of Nottingham, it set up the Malaysian campus in 2000, although the idea was suggested as early as 1992.

‘Educational real estate boom’

“Overall, Southeast Asia will be caught in an educational real estate boom as students, faculty and service industry workers converge in university towns. As the university usually allows limited working hours for its students, it would also create a highly educated temporary and part-time workforce (at a fraction of the cost), hence helping the surrounding businesses. And this workforce will stay around for 3 – 4 years following the typical duration of their degree course,” Tee continues.

He adds that these university townships like Cyberjaya and EduCity are also very well-planned to international standards. While much of the residences surrounding them are planned for typical families such as landed double-storey houses, there is an increasing number of developers building apartments targeted at the student population. “These usually come with Guaranteed Rental Returns (GRR) and are something worth exploring as they provide a safe investment with guaranteed returns provided the developer has signed a contract with the university to rent a specified number of units for a certain duration, usually up to 10 or 15 years.”

Universities are usually fine with the arrangement as during good or bad times, students still need accommodation. Many first year students are also bound by their universities to stay in university-appointed accommodation to ensure their safety and help with adjusting to living away from their homes.

“The student accommodation market is burgeoning particularly in the UK and US, and now more and more, the trend is shifting to Asia. Eventually, I forecast the emergence of townships from such education hubs,” Tee predicts.

Although a number of the schools and universities are still under construction, it is expected that this trend will be big as Asians have traditionally valued education and are willing to pay for it. An example is Marlborough College (located in EduCity) whose fees are between RM100K – RM150K per child per year, yet there is a waiting list. Half of the students are from Singapore (no surprise there). There are even specially pre-cleared buses for the students from Singapore to Malaysia. At slightly lower fees is the upcoming Raffles American School with fees ranging between RM80K – RM100K per year per child which is also attracting a lot of interested parents.

Incidentally, at the time of printing, the Malaysian government is still deliberating whether to allow universities from China to set up international schools in Malaysia teaching their own syllabus. Currently, international schools in Malaysia are allowed to teach the school syllabus of foreign countries namely the US, UK, India, Australia and Canada. There is a very high likelihood that approval will be granted.

Screen Shot 2016-05-07 at 2.06.30 PM“I personally welcome this latest development but it is still under discussion,” says Senator Chong Sin Woon, Malaysian Deputy Minister of Education. “There is an increasing need for such a syllabus to be taught in Malaysia due to more Chinese nationals staying and working here,” he adds.

With the proliferation of such international schools, it follows that properties surrounding these schools will see higher capital appreciation from those located further away. Statistics and anecdotal evidence seem to support that although Metro Homes’ See is hard-pressed to see a strong correlation. “I believe international schools are just part of [the development cost of providing good facilities] and is not the sole factor for the price increase, if any.”

In fact, according to him, nowadays, every major developer (in Malaysia) is adding an international school or higher education institution within their development to attract buyers. “It works well for them as the school is also a source of long-term income stream for them once it is established,” he notes, adding that, “every major townships seems to have one now.”[/ihc-hide-content]

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