Not only has the Covid-19 lockdown led to the UK’s ‘beds for rent’ sector
becoming the clear winner for investment, but it is also still set to grow
– according to one report.
The findings from Investec Real Estate are revealed in
their Future Living report – ‘Beds for Rent: A Golden Age‘.
The firm surveyed more than 52 global institutional investors who represent
£514 billion in assets under management to see how the Covid pandemic has
transformed investor attitudes towards real estate.
And, according to their findings, build to rent (BTR) has become crucial to
their investment plans with 60% of investors saying they are investing in
the BTR sector currently.
Investors are committing more than £1 billion to BTR
The findings also highlight there has been a fivefold increase in investor
numbers who are committing more than £1 billion over the next five years to
BTR.
On top of that, 85% of the investors said they are expecting to maintain or
increase their portfolio allocation over the next 10 years towards the beds
for rent sector.
In comparison, just 58% of investors said they were allocating funds for
offices.
When questioned about location, more than 80% said the most attractive
areas for bed for rent opportunities are outside of London.
BTR and purpose-built student accommodation
The report also highlights that 71% of investors say that BTR should be
viewed as a two-tiered sector with BTR and purpose-built student
accommodation (PBSA) becoming fully established sectors versus other asset
classes.
The investors say that the next sector that is most likely to establish
itself in the UK is retirement living.
That’s because 60% of investors see this as particularly appealing as an
investment opportunity over the next five years.
Investec’s head of real estate, Mark Bladon, said: “The beds for rent
sector is now core to investor strategies.”
Simon Thompson, the managing director of Accommodation for Students, said: “In recent years there
has been a lot of investment in purpose-built student accommodation in
response to growing numbers of students and the growing popularity of the
higher education sector, especially from overseas students.
“There are still opportunities for landlords with one or several student
homes in their portfolio but there’s no doubt too that institutional
investors are taking more interest in the sector.”
