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Multifamily Investment Hits Record High in 2020

Commercial People can reveal that the UK Multifamily sector recorded a record high of £3.5 billion, according to the latest Marketview report from global real estate advisor, CBRE.

In the report, Investment levels were up 30% on 2019 and 15% up on the previous record in 2018, illustrating the resilience of the sector in light of the challenges posed by the Covid-19 pandemic.

While rents have faltered in other investment industries such as Retail and Offices, the average rent collection rates for the Multifamily sector hit approx 97% with occupancy levels increasing to 88%.

The fourth quarter of 2020 saw £955.7m worth of deals completed including the sale of Realstar’s £570m portfolio of Multifamily and Student Housing.

CBRE fully expects this positive momentum to continue into 2021 with £1.6bn worth of deals across the UK under offer at the end of 2020. London accounts for 51% of this pipeline with £810m worth of deals under offer.

Commenting on the report and what lies ahead, Peter Burns, Managing Director, UK Development and Residential Capital Markets, CBRE said: “The market has shown incredible resilience in 2020 with Build to Rent (BTR) transactions bucking the general trend and delivering a record year for investment.

“As we enter 2021 this trend is expected to accelerate, with demand increasing as overseas investors are able to travel to the UK when international borders re-open. This demand, coupled with more developers shifting their focus to BTR product lines, and higher quality investment grade stock becoming available to purchase, we expect to see a significant increase in deal-flow with approximately £7bn of trades per annum by the end of 2025.”

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