Investment into build to rent surged to the highest level on record last year, as the pandemic and economic downturn failed to dent the sector’s growth.
BTR transaction totals hit £3.5bn last year, up 30% on the previous year, new data from CBRE reveals.
The agent said ongoing investor demand will see BTR rise to £7bn transacted a year by 2025.
As the sector matures larger deals have focused on completed and stabilised portfolio trades. In 2020, the biggest deals included Germany’s ECE buying Dandara’s £400m regional portfolio, AXA IM’s £800m Dolphin Square purchase and QuadReal’s £570m portfolio buy from Realstar.
The latter contributed to some some £955.7m committed in the fourth quarter. CBRE reports a further £1.6bn under offer at the end of the year. More than half of this was focused on London, at £810m in deals, with further capital chasing schemes in Bristol, Glasgow, Leeds, Manchester, Newcastle and Sheffield.
Peter Burns, managing director for UK development and residential capital markets at CBRE, said he expects “a significant increase in deal-flow” in 2021.
He said this will be driven by a rise in overseas interest, once international borders open. Burns also predicted “more developers shifting their focus to BTR product lines and higher quality investment grade stock becoming available to purchase”.
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