Investment in the UK Build to Rent sector hit a record high in 2021. According to preliminary data from global real estate advisor, CBRE, property funds, banks and institutional investors invested a total of £2.1bn of investment in Q4 2021, taking the full year total to a record high of £4.1bn.
Investment levels were up 14% on 2020 – the previous record year, illustrating the resilience of the sector in light of the continued challenges posed by the Covid-19 pandemic. This positive momentum is expected to continue in 2022 with provisional data showing £1.95bn of deals under offer at the end of 2021.
Build to Rent investment activity in 2021 was evenly split between London and the Regions. Notable deals completed in Q4 2021 include Greystar’s acquisition of a minority stake in the Fizzy Living platform, assuming management responsibilities for the portfolio alongside majority stakeholder, ADIA, Patrizia’s £100m forward commitment of Oliver’s Place, Huntley Wharf in Reading, Cortland’s forward funding of Colliers Yard, Manchester for c£158m as well as L&G’s £500m investment into schemes in London, Glasgow and Southampton.
In 2021, Moda Living also announced the launch of its co-living platform with a £1bn pipeline. Apache Capital and KKR’s JV also secured a £157m debt facility from BentallGreenOak, and formed a £1.7bn strategic partnership to deliver the next phase of Build to Rent housing pipeline with Moda Living. Europa Capital also acquired a Birmingham scheme through a forward funding agreement.
2021 also saw a drive in single-family housing, with Ares Management and Moda Living launching its single family housing venture – announcing the brand as Casa by Moda. Apache Capital also announced the launch of Present Made, its single-family Build to Rent platform targeting net zero carbon and using MMC’s. We also saw Richard Berridge produce an in-depth white paper on single-family housing, which investigates all aspects of the emerging sector.
The Build to Rent sector also attracted new entrants. Lloyds Banking Group announced its entry into the sector with its Citra Living brand, which made three senior hires to its management team. John Lewis also announced it plans to build 10,000 Build to Rent homes over the next decade.
“The Build to Rent investment market had a stellar performance in Q4 with more than £2bn of capital committed. This underlines the growing maturity of the UK Build to Rent market and reflects the phenomenal bounce back we have seen in the occupational market over the second half of the year. 2021 represents an undeniable record for the sector and with almost £2bn of assets under offer, we expect this momentum to continue into 2022 as the sector continues to go from strength to strength.”Jason Hardman, Executive Director, Residential Valuation & Advisory Services, CBRE