Momentum Continues in UK Build-to-Rent Sector with Record-Breaking H1 Investment Volumes
· H1 2022 investment volumes represent an 11% increase year-on-year
· Pipeline for the remainder of 2022 points to meeting or exceeding 2021’s record-breaking year
The UK Build-to-Rent (BTR) sector recorded a total of £1.76bn investment in H1 2022, reflecting an 11% increase year-on-year, according to new preliminary data from global real estate advisor, CBRE.
This is a new record for H1 investment in the sector. For the second quarter of 2022, investment volumes reached £900m, up 14% year-on-year from Q2 2021. The strong appetite for stabilised assets continued, accounting for £270m of Q2 2022 investment activity.
The sector achieved record-breaking investment volumes of £4.4bn in 2021, with 2022 set to match or exceed this based on year-to-date deals completed and the under-offer pipeline, which sits at £2.6bn.
Key deals transacted in the second quarter of 2022 include Swiss Life Asset Managers and Mayfair Capital’s acquisition of Duet BTR scheme in Salford, the forward funding of Lisbon Street, Leeds by Cortland Group, and Get Living’s forward funding of Sherlock Street, Birmingham.
Capital has been mainly deployed across the regions in the second quarter, following first quarter activity that was concentrated in London and the South. Furthermore, 75% of investment for the second quarter was in prime regional centres, illustrating a return of confidence in the wider market.
The regional focus is further reflected in the under-offer pipeline, with 87% of deals under-offer spread across regional markets. At a sector level, more than £500m of deals under-offer are Single Family Housing, indicating strong growth for the sector this year.
The UK Build-To-Rent sector is showing positive momentum and resilience in the face of headwinds such as cost inflation and interest rate increases. The continued investment into regional markets across the UK is reflective of both investors chasing yield and the ongoing undersupply of stock.