Institutional investors are planning to deploy £45bn into UK living sector assets over the next five years, according to Knight Frank’s NextGen Living 2025 report.
The firm’s research, which is based on insights from 56 institutional investors managing more than £60bn of UK living assets, found that by 2029, nearly a quarter intend to double their current exposure, with close to half targeting at least 80% increases in allocation.
Investor appetite for high growth sub-sectors looks set to surge, with the proportion of investors targeting seniors housing rental expected to nearly double from 21% today to 39% by 2029.
Exposure to single-family housing is also projected to increase significantly, with the proportion of investors rising from 41% today to 71% by 2029.
Oliver Knight, head of residential development research at Knight Frank, said: “The UK’s living sectors have experienced a significant transformation over the past five years, with the total value of the market increasing by 45% over that time as established players expand, and global newcomers look to capitalise on the opportunity.
“Growth hasn’t been without challenges, but the future is bright. Our research confirms investors continue to see a compelling case for investing in assets that benefit from changing ways of living and which provide strong counter-cyclical features that can help them achieve consistent returns.”
James Mannix, global head of living sectors at Knight Frank, added: “The living sectors continue to demonstrate remarkable resilience and growth. The fundamental drivers – migration, urbanisation, aging populations, and increasing student numbers – are all structural tailwinds that bridge economic cycles.
“We’re seeing investors not only deepening their exposure to established segments, but also strategically expanding into emerging areas like seniors housing and single-family housing. Our research indicates that by 2029, 30% of the investors surveyed in this year’s report, expect to be invested across all living sectors.”
