City’s build-to-rent boom is pulling in institutional investors

Interest from institutional investors in Manchester’s build-to-rent sector is continuing to grow according to professional services and property investment management specialist JLL.

Following the consultant’s predictions for house price and rental growth in Manchester earlier this month (6.5% and 3.5%respectively), it says more build-to-rent homes will be delivered in the city over the next five years thanks to sustained investor interest.

According its analysis, the build-to-rent model in Manchester is helping bring forward new schemes at a faster rate than the traditional open-market sale model.

Despite the pipeline of new schemes on the horizon, it forecasts projected demand increases from tenants because of population growth in the city over the coming years and an increase in tenants moving from traditional buy-to-let properties to purpose build-to-rent schemes.

The analysis follows the team securing about £165m worth of forward-funding deals last year in Greater Manchester alone that will create 756 new apartments.

It agreed funding for UK Land and Property’s Gore Street development in Salford, Peel Media’s scheme at Plot D1 in MediaCityUK and it acted on behalf of DTZ Investment Management to acquire Mulbury’s new scheme on Blossom Street in Ancoats.

In Liverpool the same team has also structured the forward funding of Panacea Developments and Patten Properties 21 The Strand which will provide 383 high end apartments.

Robert Hogarth, residential investment and development director at JLL, said: “While much noise has been made about the Build-to-Rent sector in Manchester, in fact, there are still few live schemes.

‘’JLL manages the largest completed scheme in the city, LIM’s ‘No1 Greengate’, which has shown that high-quality rental accommodation can be successful in Manchester – the take up rate of apartments has been strong and tenants are leasing for longer periods than elsewhere in the city.

“As tax changes make buy-to-let properties less favourable for individual investors and tenants begin to demand on-site amenities, we see the market naturally gravitating towards Build-to-Rent across the country. The delivery of new homes ultimately supports the economic growth of the city.”

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