Investment in the private rented sector (PRS) overtook student housing investment in the UK for the first time in H1 2018, according to research from JLL.
UK PRS attracted more than £1.6bn in the first half of the year, compared to £1.2bn invested in student housing.
However, hotels are still the most popular alternative sector, with more than £3.2bn invested in the first six months of the year.
Alternatives now make up 29% of the total UK market – up from 26% in 2017. Investment into alternatives hit £7.4bn in the first half, and JLL expects the year’s total to come to £17bn, which would make it the most active year on record.
James Kingdom, head of alternatives research at JLL, said there are hurdles to investment despite appetite growing to potentially record levels.
“One of the main challenges investors face when trying to access alternatives is finding institutional grade product at the scale that they require,” he said.
“Development is one way of solving that challenge, but we are seeing a growing number of ways for investors to enter the market, both for living space and the supporting social infrastructure markets such as self storage and automotive.”
Development and forward funding make up 52% of all PRS investment but just 2% of hotel investment.
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