UK multifamily investment activity slows in Q3 2021

UK multifamily investment activity slows in Q3 2021

According to provisional data from CBRE, £374 million of investment activity was recorded in the UK multifamily sector during Q3 2021.

This represents a 76% decrease on the same period last year, which saw unusually high levels of investment as a result of some significant deals including Phase 2 of Lewisham Gateway and AXA IM’s acquisition of Dolphin Square.

This brings the year-to-date total to £1.92 billion, 28% down on the first nine months of last year.

Despite more subdued levels of activity so far this year, the transaction pipeline remains exceptionally strong with £2.9bn of transactions under offer, according to CBRE.

Prime Regional Centres accounted for the highest proportion of investment in Q3, representing 48% of the total, with notable transactions including the £73m forward funding of The Castings in Manchester by CDL and Baring’s acquisition of The Trilogy, Manchester for £53.5m. Legal & General also forward funded Hove Gardens in Hove for £76.5m which will provide 216 homes for rent.

”The slowdown in investment activity seen in Q3 reflects the continued restrictions to travel as a result of the pandemic, which have been a particular barrier for international capital. This has been coupled with labour and material shortages, which have delayed transactions. Despite these challenges, investor sentiment remains very strong, we have seen competitive bidding for assets across the board and the occupational market is robust. As such, we are anticipating a strong final quarter of the year,” said Peter Burns, Managing Director, UK Residential Capital Markets, CBRE.