Investors ploughed £4.1 billion into build-to-rent (BTR) last year, betting that purpose-built flats would provide more reliable returns than other sectors, according to global real estate advisor CBRE.
The firm says activity was evenly split between London and the regions with notable deals that completed in Q4 2021 including Greystar’s acquisition of a minority stake in the Fizzy Living platform, Patrizia’s £100m forward commitment of Oliver’s Place, Huntley Wharf in Reading, Cortland’s forward funding of Colliers Yard, Manchester for £158m, as well as Legal & General’s £500m investment into schemes in London, Glasgow and Southampton.
Lloyds is also aiming to expand aggressively into the sector while last year retailer John Lewis announced plans to build a residential property portfolio to offset weakness in its high street stores.
CBRE reports that last year’s figure is £500m higher than 2020’s previous record, while almost £2 billion worth of deals are already in the pipeline for this year, fuelling growth that looks set to continue due to a chronic lack of homes in the UK.
“The build-to-rent investment market had a stellar performance in Q4 with more than £2 billion of capital committed,” says Jason Hardman (pictured), executive director, residential valuation & advisory services.
“This underlines the growing maturity of the UK build-to-rent market and reflects the phenomenal bounce back we have seen in the occupational market over the second half of the year. 2021 represents an undeniable record for the sector and with almost £2 billion of assets under offer, we expect this momentum to continue into 2022 as the sector continues to go from strength to strength.”