Investors are forecast to spend an additional £45bn on UK living sector assets over the next five years, according to Knight Frank’s latest UK Living Sectors Investor Survey.
The firm surveyed 50 institutional investors who currently have more than £76bn worth of living sector assets under management and found 71% of respondents expect total investment into BTR, seniors housing and student accommodation to “significantly increase”between now and 2028.
Some 67% of investors said they intend to enter the senior’s market in the next five years – a significant increase on the 40% who currently invest in the sector – while 71% said they want to be active in the single-family rental market, up from 45% currently.
Oliver Knight, head of residential research at Knight Frank said: “Over the past five years the living sectors have experienced a steady rise in investment, from less than £8bn in 2018 to more than £15bn last year. Our survey points to further growth over the medium term. There is a compelling case for investing in assets that benefit from changing ways of living and which provide strong counter-cyclical features and inflation-matching characteristics that can help investors achieve consistent returns.”
James Mannix, global head of living sectors at Knight Frank, added: “The UK’s living sectors have experienced a surge in investor enthusiasm and unprecedented levels of growth over the past five years. Established players are expanding aggressively, and global newcomers are seizing opportunities.
“That said, the growth of the sector hasn’t been without challenges – notably surging debt costs and regulatory barriers. But the future of the living sectors is bright: interest rates will peak, and fresh capital will flood the market in Q4 2023. Equally, untapped equity hints at a transactional resurgence.”
