London - Floor to ceiling windows, chairs by French designer
Philippe Starck, four-poster beds and a short walk from the Louis Vuitton store
on London's Bond Street.
These are no ordinary student digs.
Apartments for rent in London's most exclusive
neighbourhoods have traditionally been the preserve of bankers.
As the potency of the financial sector wanes, they are
increasingly let to children of the international super-rich studying at the
"I chose the place and then asked my parents whether it
was alright," said Sumiro, a 21-year old Indonesian student who will be
living alone in the £895 a week two-bedroom apartment with the Philippe Starck
chairs when he starts university in September.
Another attraction were his numerous friends living nearby,
Unlike the stereotypical British students who squeeze into
cramped flats and shop in budget stores, the offspring of the super-rich
exhibit a taste for luxury furnishings, in-house gyms and cleaners that visit
twice a week.
"They're looking for a hotel room," said Naomi
Heaton, chief executive of residential fund manager London Central Portfolio
(LCP), which has students from Russia, China and Saudi Arabia renting homes in
an overall property portfolio worth £500m.
"Many of them would have experienced a fairly
sophisticated lifestyle, travelling around the world business class. Their requirements
are similar to that of corporate tenants."
Nadine, the daughter of a Lebanese businessman, laid out her
"We didn't want a typical British student pad, we
wanted something quite big, quite decent, so that there would be space for our
parents and friends when they visited," said Nadine, who lived in a £2
400-a-month London flat while studying last year.
The rise of the wealthy foreign student comes as companies
in the financial sector cut jobs and budgets, under pressure from shareholders
At the same time, strong economic growth in China and other
parts of Asia has created immense wealth, mainly fuelled by manufacturing,
construction and commodities. The number of US dollar millionaires in Asia
outnumbered North America for the first time in 2011.
It has led to a surge in demand from overseas buyers of the
best London homes, seen by many as a sound investment.
Prices for the most sought after central London properties
have risen about 44% in the last three years, more than twice the increase
across the capital as a whole, Knight Frank data shows.
"The wealth underpinning the student market is stronger
than the wealth underpinning the corporate tenant market," Heaton said.
Paris and New York are also popular student destinations. In
February, Russian fertilizer oligarch Dmitry Rybolovlev paid $88m for New
York's most expensive apartment, a penthouse the size of two and a half tennis
courts with views of Central Park, for his student daughter Ekaterina
The previous owner was a banker - former Citigroup CEO Sandy
Parents keen to get the best located homes for their
children are often prepared to outbid bankers, Heaton said. They also sometimes
pay a year's rent upfront as their children don't have a UK credit history.
LCP research showed the proportion of homes in prime
neighborhoods like Mayfair and Knightsbridge rented by international students
doubled to 23% in the six years to June 2012, becoming the second largest group
behind the financial sector at 45%.
"With the current rates of growth, international
students would represent 50% by 2020," LCP's Head of Investment Management,
Hugh Best, told Reuters, saying expansion in the financial sector was likely to
Job cuts among bankers caused prime London rents to fall for
the first time in two years, property consultant Savills said on June 22.
Foreign students in the City of Westminster district, which
includes some of the city's priciest streets, pay an average annual rent of £28
878, LCP said. By contrast, the average UK student paid £3 490 in 2011, data on
UK website Accommodation for Students said.
About 26% of London's students are from overseas, with
China, India and Nigeria sending the most students to the UK between 2009 and
2011, data from the UK Council for International Student Affairs showed.
Bankers squeezed by cut budgets were eyeing moves to cheaper
housing in less central London neighborhoods such as Fulham or Bayswater, said
Matthew Hobbs, who heads up the lettings team at Savills's Kensington office.
"Instead of spending £1 000 a week, they're spending
£800 a week. They're scaling back. You can rent a nice house in Islington for
80% of what you can rent a nice house in Kensington for."
Renting often paves the way to buying, Heaton said, as
students will persuade their parents to buy a London property once they are
familiar with the city, another factor helping to super-charge the central
London property market.
"It's a function of globalisation," she said.
"One generation makes the money and the next generation gets sent to