Build To Rent tipped for long-term success despite s...

Property consultancy CBRE claims that Build To Rent is likely to be the most resilient sector of the UK property industry in the coming years - and this is despite a downturn in 2020.

CBRE has tracked investment into BTR since the sector emerged in 2015.

After a strong start to the year, with over £1 billion of investment in new projects in the first quarter of this year, it has joined all other sectors of the property industry in seeing a major downturn in the second quarter.

Even so, CBRE says some schemes are moving forward.

These include a £125m scheme in Birmingham from Court Collaboration, and a 440-apartment project - again in Birmingham - from Taylor Grange. Amro Real Estate also has plans for 278 homes at Ealing in west London.

The consultancy says there is a substantial investment pipeline with just over £1.4bn worth of deals currently under offer. This is broadly equivalent to the investment pipeline at the end of 2019, which then translated into £1 billion of investment in Q1 2020.

Scott Cabot, CBRE’s associate director of research, says: “It’s little surprise that there was a sharp downturn in investment in Q2, as the lockdown halted activity. But this period has also highlighted the resilience of the … sector. Rent collection rates have remained high, and historically rents have declined less and recovered quicker during downturns, giving investors some confidence to proceed.

“With £1.4bn of deals currently under offer, we anticipate a rebound in … investment in the second half of 2020, and a return to growth in 2021.

“While we may see modest rent falls in 2020, we expect the sector to return to growth in 2021 and outperform other sectors.”