With a disappointing start to the year, which saw approximately £200m invested in the private rented sector (PRS) market in the first quarter, the CBRE reports that the investment total for quarter two has rapidly grown to over £900m, with the number of investors targeting the market also increasing.
Q4 in 2017 actually set a slightly higher record, largely due to a strong Q3. The difference being insubstantial and an increase in Q2 from 2017 shows signs that 2018 could be the strongest year for the PRS market.
Some of the more significant deals in the quarter include a joint venture between Universities Superannuation Scheme and Places for People, and a £200m transaction by M&G Real Estate, funding residential property.
This data from the CBRE gives us the scope to see how the remainder of the year will unfold. Based on the £1.15bn already invested and an additional £1.15bn of deals under offer, this could be a record-breaking year.
To echo this, institutional equity targeting the UK PRS increased during the second quarter, albeit only slightly, up to £32.7bn.
Within the report, the CBRE state that “appetite remains strong, with many international developers circling the market and indicating a preference for direct land purchases.”
Inward investment from UK firms made up a quarter of this total investment figure. In addition, the US accounts for almost a third of the total, with the Middle East and the rest of Europe having also invested significant funds.
Although these large-scale investments do not directly affect small investors or ‘accidental landlords´, these trends in the larger market aid in shaping the overall market. For the big players in the market to not only have faith in the market but to also increase their investment shows that the outlook of the PRS market is looking very bright.
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