Build-to-rent sector hoovers up £2bn investment in 2019

New figures from CBRE show that in the first nine months of 2019 £2bn has been invested in build-to-rent schemes in the UK.

The build-to-rent sector in the UK is continuing to prove attractive to investors, despite concerns over the country’s drawn out departure from the EU.

The third quarter clocked up £743m alone, with Mitsubishi Estate and Invesco ploughing more than £200m between them into the sector during the period.

Mitsubishi Estate, the Japanese property developer, agreed to forward-fund a Galliard Group scheme in Nine Elms in south London to the tune of £150m, while the UK arm of US investment firm Invesco stumped up £98m to fund nearly 500 apartments in the centre of Birmingham.

Invesco is also backing Telford Homes as part of a three-year deal.

CBRE said the momentum from the first nine months of the year was being carried over into the fourth quarter, with around £650m of transactions under offer.

Total investment in UK BTR schemes in the past five years has hit £10.6bn, CBRE said.

Helen Gray, a senior director at CBRE’s multifamily consultancy, said investors were attracted to the secure, long-term income profile “and the diversification play of multifamily housing, all of which is all underpinned by the strong supply and demand fundamentals of the UK housing market.

“The transactions in the third quarter illustrate investors are continuing to focus on London and regional cities, which is closely aligned to where the renter demand is,” she added.

Domestic housebuilders are also taking more notice of the sector. Last month, Redrow agreed to deliver more than 500 homes in London as part of two new private build-to-rent deals with property group Realstar worth more than £180m.