Expats in Asia hunting for more affordable education

For investors, this means there are "more routes into Asia's international education market than ever," says Noeleen Goh, Director of Alternative Investments at JLL.

May 22, 2018

HO CHI MINH, 21 MAY 2018 – Being an expat in Asia isn't what it used to be. Before the financial crisis, people who took a job for large multinational companies in cities like Singapore or Kuala Lumpur could count on allowances for housing and school fees for their children.

Those packages have all but disappeared in the decade following the 2008 financial crisis and a pull-back among big oil firms in the region. In response to the resulting tighter budgets, more affordable international schools have been springing up around Southeast Asia.

For investors, this means there are "more routes into Asia's international education market than ever," says Noeleen Goh, Director of Alternative Investments at JLL. "It's really being driven by this proliferation of mid-priced options."

Premium education options – generally tied to well-known British or American brands – long dominated international school markets in Southeast Asia. Take Singapore, where high-end international schools can cost S$40,000 a year for elementary-age children.

Unlike other markets in the region, Singaporean citizens can't attend international schools in Singapore past pre-kindergarten level, meaning international schools there cater exclusively to expats. But without lucrative financial packages, demand among expats has shifted to schools that can be half the price.

Singapore's Economic Development Board releases land tender for school development or school campuses for lease, and issues school operating licenses when it wishes to expand the network, which usually occurs when it anticipates the need for more capacity.

Recently, Singaporean government policy has also aimed to make sure these mid-priced options are increasingly available. For example, the last two tenders for education campus leases in Pioneer Road and Tampines required participating schools to have an all-in school fee cap of S$22,000 a year. One World International School and Middleton International School eventually won the two sites.

Changing local demand

It's not just demand from expats changing the education market across Southeast Asia. Burgeoning local middle classes, shrinking family sizes and more disposable household income have contributed to the surge in demand for international schools at the mid-price level.

Around 80 percent of students attending international schools in Asia are the children of local parents, according to ISC Research.

Mid-fee schools differ from the premium segment in that they typically have larger class sizes, fewer facilities, a narrower curriculum and occasionally less stringent teacher qualifications.

In Malaysia, changing government regulation has again played a major role. Rules around Malaysian parents sending their children to international schools have changed significantly in the last decade. Prior to 2007, Malaysians weren't allowed to attend international schools. Between 2007 and 2012, there was an enrolment cap for locals at 40 percent.

Now, without any cap, more local Malaysian students attend international schools than non-Malaysians.

Vietnam is also relaxing regulations. The cap for local students at international schools is set to rise to 50 percent from 20 percent.

"The increasingly competitive education market is shifting away from premium to mid-range across the region," Goh says.

About JLL


JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

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