Record Q1 UK Build-to-Rent/Multifamily Investment, with over £1bn transacted

  • CBRE recorded £1.04bn of institutional investment into the UK’s private rented sector (PRS) in Q1 2019
  • An additional 1,981 private rented homes have either completed or are in the pipeline since Q4 2018

  • At the end of Q1 there was £772.9m worth of deals under offer

UK build-to-rent, known as multifamily housing in large parts of Europe and North America, goes from strength to strength, with record levels of investment in the first quarter of 2019, according to the latest residential investment research from CBRE.

CBRE UK Residential Investment Marketview Q1 2019 shows that between January and March 2019, there was a total of £1.04bn of investment into the UK private rental sector for build-to-rent schemes, including several forward funding deals, and some direct site acquisitions. This is four times higher than in Q1 2018 and is among the strongest quarterly investment volume recorded since 2015.

The CBRE report highlights the major deals in the first quarter of 2019 and signifies strong momentum as we head into the second quarter, with close to £780m of deals under offer.

Institutional investment into build-to-rent has translated into over 140,000 homes across the UK which are either completed or in the pipeline, with an increase of 1,981 homes from Q4 2018, according to figures from the British Property Federation.

CBRE’s key yields remain broadly stable, with a marginal softening for prime assets in London Zone 2.

To read the report:

Alex Davis, Senior Director, Residential Capital Markets, at CBRE UK
Investment into the UK build-to-rent market continues to build real momentum. CBRE recorded a further £1.04bn of institutional investment into the sector in Q1 2019, which was four times higher than Q1 2018, and the strongest start to a year on record.

Much of this growth has been driven by international investment, with the large North American funds making their mark, particularly in London. For example, Realstar has forward funded a 161-home scheme in Hackney, while Telford Homes was advised by CBRE in securing £105.5m of forward funding for their Equipment Works build-to-rent development site in Walthamstow by a joint venture between Henderson Park and Greystar.

CBRE was involved in the biggest deal of the quarter, advising Canadian institution PSP Investments throughout the formation of a new partnership between Unibail-Rodamco-Westfield and PSP Investments and QuadReal Property Group, known as the Cherry Park Partnership. The partnership will deliver a £670m private rental scheme adjacent to the Westfield shopping centre in Stratford, and feature 1,200 rental homes in an area where we are seeing growing demand from renters.  

While the North American investors have been busy in London, European investors have been much more active across the UK. In particular, L&G has closed on two large forward funding schemes; 324 units in Glasgow and 104 units in Chelmsford. This highlights the growing appetite – particularly amongst UK institutions – to explore ‘new’ markets across the UK’s regional centres and try to grow their portfolios more aggressively.
Alex Davis, Senior Director, Residential Capital Markets, at CBRE UK