Publications

- June 1, 2016: Vol. 10, Number 06

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Welcome to the neighbourhood

by Larry Gray

They may not receive a bouquet of flowers, a plate of cookies or an invite to a neighbourhood BBQ, but an increasing number of institutional investors are moving in and making themselves at home in UK residential neighbourhoods.

The United Kingdom’s private rented sector (PRS) is attracting both domestic and international capital, and for good reason. Besides offering diversification to their real estate portfolios, institutional investors have been attracted to the PRS because of its compelling combination of reliable income growth and robust capital values. In fact, it has been reported that residential rental accommodation property values in the United Kingdom have jumped by more than 50 percent over the past five years.

“There’s enormous potential in the United Kingdom’s private rented sector because of the significant historical undersupply of new homes being built,” Ed Crockett, a fund manager at Aberdeen Asset Management, noted in a recent statement.

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