UK Residential Investment Yields | December 2018

UK Residential Investment Yields | December 2018

Big deals dominate Q4 so far 

Since we issued our September yield benchmark the larger deals have caught the headlines.

At the start of the quarter, the Delancey led group and Lonestar appeared to come within a hair’s breath of creating a true goliath for Build to Rent in the UK. If the former had successfully acquired Quintain and Wembley Park it would have led a combined pipeline of more than 13,000 dwellings. For the time being at least their respective platforms of Get Living and Tipi will go head to head in spearheading large scale BTR in London.

The most significant transaction of Q4 has been Grainger’s continued investment in the sector by acquiring APG’s stake in their GRIP REIT partnership in a deal that valued the London focussed portfolio at more than £700m. The fact that the purchase was supported by shareholders and a fully underwritten share issue provides a great boost for confidence to the London market.

We leave our key yields unchanged over the quarter reflecting the continued strength of pricing in this sector.

Jason Hardman

Jason Hardman

Executive Director

t: +44(0)20 7182 2802
jason.hardman@cbre.com

UK Residential Investment Yields | September 2018

UK Residential Investment Yields | September 2018

Summer heat buoys the Residential Market during Q3

Following a very broad geographical spread in Q2 2018, transactions in Q3 so far have mostly been concentrated in Greater London and Manchester. With more than £650m committed over Q3 to date and with the run up to the year end typically being very busy, things look positive for last year’s total of £2.4bn to easily be surpassed in 2018.

Whilst some have concerns regarding oversupply risks, there seem to be plenty of parties still keen to secure stock in Manchester as illustrated by Legal & General continuing its investment in the city with the forward purchase of one of Renaker’s towers at Deansgate. With many other deals in hand in Manchester and Liverpool, confidence in the North West is clearly being drawn from the successful letting of Build to Rent schemes owned by the likes of Hermes and Legal & General.

In London, Invesco continued its track record of being one of the most active market participants, sealing the forward funding of Ecoworld schemes at Barking and Kew. Realstar also added to its expanding portfolio buying Hyde’s New Cross scheme.

The sector continues to attract new participants with Cording, Amro and Palmer Capital all making announcements or funding raising in recent months.

We leave our key yields unchanged over the quarter reflecting the continued strength of pricing in this sector.

Jason Hardman

Jason Hardman

Executive Director

t: +44(0)20 7182 2802
jason.hardman@cbre.com

UK Residential Investment Marketview | Q2 2018

UK Residential Investment Marketview | Q2 2018

High demand sees almost £1bn transacted

• CBRE recorded £907.3m of institutional investment into the UK’s private rented sector (PRS) in Q2 2018.

• At the end of Q2 there was £1.15bn worth of deals under offer.

• The volume of institutional equity targeting the sector totals £32.7bn.

• An additional 6,000 private rented homes are either completed or in the pipeline since Q1 2018.

• Yields continue to strengthen in regional markets outside of the key cities.

Jason Hardman

Jason Hardman

Executive Director

t: +44(0)20 7182 2802
e:mailto:jason.hardman@cbre.com

James Castle

James Castle

Senior Director

t: +44(0)20 7182 2731
e: james.castle@cbre.com

Scott Cabot

Scott Cabot

Associate Director

t: +44 207 182 2362
e: scott.cabot@cbre.com

Arthur McCalmont

Arthur McCalmont

Senior Director

t: +44 207 182 2567
e: arthur.mccamont@cbre.com

UK Residential Investment Yields | June 2018

UK Residential Investment Yields | June 2018

Strong investment volumes have surpassed Q2 expectations

Q2 has surpassed expectations, with more than £800m of capital committed by mid-June and more than £250m worth of deals expected to close by the end of the quarter.

Activity is spread far and wide with deals in Edinburgh, Reading, Milton Keynes, Southampton demonstrating the strength of investor interest across the UK. Yields continue to strengthen in regional markets outside the top cities.

Joint ventures, platforms and access to land will remain a key theme going forward with the current marketing of Quintain’s Wembley Park business, USS and Places for People revealing their JV and Ballymore making a positive announcement to use Build to Rent as a sales exit for a proportion its London pipeline. The property press has also reported that British Land is considering acquiring an interest in Fizzy Living.

Jason Hardman

Jason Hardman

Executive Director

t: +44(0)20 7182 2802
jason.hardman@cbre.com

James Castle

James Castle

Senior Director

t: +44(0)20 7182 2731
james.castle@cbre.com

UK Residential Investment Yields | March 2018

UK Residential Investment Yields | March 2018

2018 began with a flurry of announcements

Lendlease and CPPIB announced a new partnership to invest £1.5 billion into Build to Rent with an initial investment of £450 million at Elephant Park. This investment demonstrates continued appetite from overseas investors for platform transactions with similar other deals in the pipeline for 2018.

Regional activity continues to grow. Grainger has maintained its acquisition drive with the £32 million funding of Eccy Village, the second BtR scheme in the city. The Hermes/Countrywide Vista fund disposed of its initial seed regional portfolio comprising four assets after a competitive marketing campaign reflecting strong demand for a portfolio of standing assets.

Activity in Regional Centres outside the likes of Manchester, Birmingham and Leeds suggests an improvement in pricing and subsequently our strengthening of yields in these locations.

In Zones 1 and 2, yield sentiment is trending weaker driven by the continued softening sales market.

Jason Hardman

Jason Hardman

Executive Director

t: +44(0)20 7182 2802
jason.hardman@cbre.com