UK build-to-rent investment volumes in Q1 2024 totalled £433.3m, down 63% from the same time last year.
According to CBRE, total investment into the sector in Q1 2023 was £1.2bn.
Investment volume in Q1 is attributed to KKR purchasing two stabilised buildings from Quintain at Wembley Park for £250m and to Goldman Sachs and Tene Living buying three BTR assets in the same masterplan for £110m.
Earlier this quarter, L&G’s Managed Fund acquired the North Tower at Deansgate Square in Manchester that was it previously owned jointly with its UK Property Fund. L&G also forward funded a single-family BTR investment in Hastings.
Andrew Saunderson, head of residential capital markets at CBRE, said: “Investment into the sector in Q1 2024 has been more subdued, particularly relative to the end of 2023 which was bolstered by Blackstone’s partnership deal with Vistry.
“That being said, the pipeline of investment is robust with an estimated £1.6bn currently under offer. Yields were stable this quarter for the first time since 2022, indicating that prices in the sector have stabilised.
“Looking forward, with the headline rate of inflation now standing at 3.4%, the chances of a pre-summer interest rate cut have increased, which would be well received by the market.
“Government intervention, however, could hinder activity, namely, the abolition of multiple-dwellings relief as part of the Spring Budget, which will impact values, particularly in regional markets. Similarly, the continued uncertainty over the new rent control proposals for Scotland is also unhelpful for investors into the sector.”
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