Investment into build-to-rent has surged from the lowest quarterly volume on record to the highest, with £1.43bn transacted in Q3.
The figures from CBRE’s investment marketview follow just £83m reported for the previous quarter, as wary investors held off during lockdown.
Investment totals for the quarter gained a significant boost from AXA’s acquisition of the 1,233-home Dolphin Square (pictured), understood to have sold below its £850m asking price.
This saw standing stock acquisitions at under £800m, with over £600m of forward funding deals, and the balance made up from forward commit deals.
Long Harbour agreed a £156m forward funding deal for the next phase of Berkeley Square’s Berol Yard in Tottenham Hale, and Pension Insurance Corporation completed its first BTR investment with a £130m forward funding deal at Manchester’s New Victoria.
Some 80% of the funds – just over £1.1m – were committed to London, with a further £299m going to the regions. This also includes Aberdeen Standard’s third deal of the year with the £41m acquisition of Clarendon Quarter, hot on the heels of its two London-based deals the previous quarter.
At the end of September there was £1.4bn of deals under offer. If this were to transact this year, it would see £4bn of BTR investment in 2020 – up 50% from 2019 levels.
Adam Burr, head of CBRE’s residential valuation team in Manchester, said: “Over the last few months, we have seen a number of high-profile deals across the key regional centres which further underpin the robust nature of the market. And with the emergence of some new investors, some specifically targeting the regional markets, there appears to be a very optimistic outlook in the regional multifamily/single family space.”