In Asia, private education facilities are becoming more common as an investment target.

According to JLL, Asia Pacific's private education market is a growing property investment industry, powered by the region's demand for high-quality international schools that concentrate on English language learning. The private education market in Asia Pacific is projected to be worth $370 billion.

"With a growing local middle class, smaller family sizes, and more dual-income families, parents are looking for high-quality academic choices taught in English to offer their children a leg up in an increasingly globalized society," says Noeleen Goh, Director of Alternatives, Capital Markets, JLL Asia Pacific. Qatar for sale | Apartments for sale

The number of English-medium international schools in Hong Kong (China) increased from 92 in 2000 to 177 in 2017, with the number of students more than doubling during this period. English-language teaching institutions have seen a surge in popularity among parents in countries where there is no sufficient national English curriculum, such as mainland China, Vietnam, Thailand, and Japan.

Raymond Fung, JLL Hong Kong's Regional Director of Capital Markets, said, "Because of the shortage of suitable locations, combined with rising demand for international school places from local wealthy families, most Hong Kong schools are at or near capacity, with long waiting lists at virtually all of the top schools. The shortage of appropriate construction sites is the most significant obstacle to investing in the city's education sector."

Investor Interest Is Growing

Institutional investors, private equity firms, and pension funds are increasingly investing in companies that construct and operate international schools.

It's normal for operators in the private education sector to split the real estate from the operating business, giving investors the option of investing in either the education operations or the real estate properties. The former will use their funds to invest in educational facilities, which is their main industry. Real estate owners, on the other hand, may increase the asset value by either leasing the school facility back to an existing long-term education provider or constructing a bespoke campus with rents that are inflation-protected.

"With yields set to be higher than conventional asset classes, many are eager to invest in this sector because it offers high-growth and is recession-resistant due to long-term leases, making it less susceptible to market fluctuations than more traditional property assets," Goh explains.

In China, international education has a bright future.

The number of affluent Chinese parents able to spend a large portion of their household income on a high-quality education has risen in mainland China.

"On a macroeconomic level, China is well ahead of other countries in terms of GDP and per-capita disposable income growth, and the country's economy is rapidly expanding, ensuring a long market room for international education. Simultaneously, the rapid pace of urbanization and the transformation of the world's major consumers will inevitably continue to fuel strong demand for international education "JLL Greater China's Head of Alternative Investment, Steven Xing, says

However, due to limitations on nine-year compulsory education and foreign-fund ownership, international schools are having difficulty accessing the mainland China market. "Foreign investors usually enter the market through joint ventures or alliances with local players because they (sic) provide a strong understanding of the local competitive and regulatory environment," Xing says.

The study also predicts that in the Chinese economy, international education will exhibit many distinct patterns. First, as educational technology advances, online teaching platforms and emerging technology models will become increasingly common. Second, private education investment is increasing rapidly. Third, as education spending rises, the market will become more segmented than ever before.