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Record-breaking £2 billion investment in Build to Rent

Saturday 10 March 2018

Britain is seeing record breaking investment into the Build to Rent sector with more than £2 billion flowing in for the first time last year.

In 2017 the amount of investment rose by 22 per cent to £2.4 billion with 41 per cent coming from North American investors, according to the latest residential capital report from real estate consultants CBRE.

Build to Rent land sales also significantly increased during 2017 with a clear move away from prime to fringe locations, the report also shows, adding that Build to Rent is here to stay and no longer an emerging market.

Arthur McCalmont, senior director of CBRE UK Development and Residential Capital Markets, said: "With over 19,000 Build to Rent units now completed in the UK, financial investment is finally starting to translate into a housing alternative that has been well-received by tenants. 

"The response of the market, combined with a greater understanding of the Build to Rent investment offering, has engaged new operators from all over the world, as well as established investors, and we are now seeing more capital deployed into Build to Rent than ever before."

"The additional shift in activity from major cities in to fringe locations demonstrates that Build to Rent is well and truly up and running and should no longer be considered an emerging market."

Around 40 per cent of transactions were recorded in the final quarter of 2017, underpinned by strong regional activity with 59 per cent of capital deployed in London

Build to Rent operator Grainger agreed three deals for a total of £86 million in Sheffield, Manchester and Birmingham. 

Additional investment from L&G meant that Birmingham alone secured £81 million worth in investment during the fourth quarter. 

One of the landmark London deals of 2017 was CPPIB’s £250 million investment in to Lendlease’s Elephant & Castle project.

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