£27.7BN SET TO TARGET UK BUILD TO RENT SECTOR IN NEXT FIVE YEARS
There is currently £27.7 billion worth of equity targeting the UK Build to Rent sector over the next five years, according to CBRE’s Build to Rent Equity Barometer. The research suggests that a quarter of this capital is domestic whilst almost half originates from North America. The main constraint for investors continues to be a lack of available stock with the ratio of deployable equity to marketed stock currently at 14:1.
In 2016 Multi-family was a $250bn debt and equity market in the US. Institutional investors from overseas destinations, like North America, are looking for new markets to deploy their capital. As such we have launched our Build to Rent Barometer to monitor both domestic and global Investor interest in Build To Rent across the UK.
There is limited standing stock in the UK which has led to increased interest from investors looking to acquire either platforms or development opportunities released by housebuilders who see this new sector as a great way to accelerate delivery of stock.
Interest has risen, in particular, from international institutions. Whilst London has traditionally been the focus of their attention, the UK’s regional cities are becoming increasingly prominent as American funds begin to explore the market and demonstrate their willingness to move higher up the risk curve in regional cities that offer a strong investment case.
Furthermore, whilst London previously offered the majority of build to rent development units, the 70,000 strong pipeline of units that are either complete or under construction is now evenly split between the capital and the UK regions.
This is especially evident in areas providing a high volume of good quality stock near fast transport hubs. The UK is set to be a huge benefactor if developers can achieve the scale required to meet the growing demand.