The UK’s ‘operational living’ sector in the real estate market could be worth an additional £470 billion if it can address a current shortfall in supply, states BNP Paribas Real Estate.
The firm has calculated that the current combined worth of the student housing, single family rental, build-to-rent and senior living sectors is worth in excess of £190 billion.
That figure could more than double by 2029 but only if the supply shortfalls are addressed.
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In turn, the supply issue will only be addressed if a number of ‘market force’ factors fall into place, states BNP Paribas Real Estate.
These include supportive planning policies, development viability, data transparency and improved sector liquidity.
“With the potential for the size of the market to more than double, it’s clear that alongside demographic shifts and urbanisation trends, it places an emphasis on the crucial role these sectors can play in addressing the housing crisis and supporting the living needs of the future,” said Rebecca Shafran, alternative markets research at BNP Paribas Real Estate.
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“A few question marks have been placed over the future of the likes of single family rental, senior living rental models, and student living as asset classes, however, this data shows that there’s reasons to be bullish with investment allocations.”
“We’ve witnessed a significant increase in investors targeting the living sectors over the past six months, and the majority that I’m speaking to are all primed and ready to go and are eagerly awaiting the outcome of the budget,” added Andrew Screen, head of residential capital markets at BNP Paribas Real Estate.
“We also anticipate large portfolio transactions to be traded over the next 12 months which will be particularly interesting to watch in terms of pricing, yields, and volumes traded.”
