More than £2bn has been invested into the UK’s Build to Rent (BTR) sector in the first three quarters of 2019, according to the latest research from CBRE.
The CBRE UK Residential Investment Market view Q1 2019 reveals that between January and September 2019, there was a total of £2.14bn of investment into the UK private rental sector for Build to Rent schemes, including several forward funding deals, and some direct site acquisitions.
Investment into the sector picked up in the third quarter of 2019. There was £743m of investment in Q3 2019, more than double the £359.4m recorded in the previous quarter.
Forward funding transactions accounted for the bulk of activity by transaction type in Q3 (£630m). These were split between London and regional cities.
Total investment into Build to Rent over the last five years has now reached £10.6bn, CBRE’s tracking shows.
Helen Gray, senior director of multifamily consultancy at CBRE said: “The demand for professionally managed, bespoke rental product continues to increase, from both investors and the renters themselves.
“Investors are attracted to the secure, long-term income profile and the diversification play of multifamily housing, all of which is all underpinned by the strong supply and demand fundamentals of the UK housing market. The transactions in Q3 illustrate investors are continuing to focus on London and regional cities, which is closely aligned to where the renter demand is.
“In addition, many investors are encouraged by the potential upside that can be gained from the right approach to product design and management. For renters, there is now a much greater appreciation for the lifestyle offer of multifamily – essentially paying for convenience, as well as a sense of community. And this is exactly what many of the multifamily operators aim to provide.
“Peoples’ lifestyle preferences are changing at a faster rate than materials can depreciate, which means our challenge is hyper-focused around how we create a built product that can evolve and retain its relevance and attractiveness over the long-term.”