Alternative asset classes have comprised more than a quarter (28%) of total investment in UK real estate so far this year, according to new research from Savills.
The adviser found that £8.3 bn (€9.2 bn) has been invested into alternatives in 2019, including the private rental sector (PRS) and student housing. That compares to £6.4 bn (€7.1 mln) into London office, £3.9 bn (€4.3 bn) into industrial and £3.1 bn (€3.4 bn) into retail. The total amount invested to date stands at £29.4 bn (€32.6 bn).
The rising popularity of alternatives is due to an appetite among investors for stable income during uncertainty caused by Brexit, and good availability of stock. Leading the charge into alternatives have been domestic investors, ploughing in just less than £5 bn.
James Gulliford, joint head of investment at Savills, said: ‘Alternatives are rapidly becoming mainstream, as political uncertainty and Brexit continue to delay decision-making in traditional markets. In response investors are turning to assets with operating models that have both perceived structural support and more stable income prospects.’
