Investec Real Estate’s third Future Living report reveals Living sector’s appeal has further strengthened versus other commercial real estate sectors. The data was gathered from 50 global institutional investors representing over £400bn of AUM (Assets Under Management).
Almost two thirds of respondents (62%) said they expect their portfolio allocation to the Living sector to increase over the next five years, compared to just 40% in 2021. Gross investment into the sector over the next 12 months is set to double compared with the previous report, with an average of £248m per respondent in 2023 versus £113m in 2021.
The student accommodation sector has seen the biggest shift in investor appetite. It has risen from tenth to first in terms of investor appeal in just two years – 59% of respondents are optimistic about student accommodation in 2023 compared to just 27% in 2021 – replacing distribution/logistics at the top of the class.
The report stated: ‘This reflects the sub-sector’s compelling structural drivers, including its decorrelation from wider economic pressures, and the reversal of the short-term challenges it faced during the pandemic.’