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Insight & Opinion

Specialist property investment to reach 20% by 2020

Author: Gemma

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Knight Frank forecast that specialist property investment will account for 20% of the total commercial market by 2020.

The property agent expects investment in the specialist market will exceed £10 billion in 2015 alone and forecast that demand for opportunities in the sector will continue to rise.

Core specialist sectors such as student property, healthcare, hotels and automotive have seen a sharp rise in investment and account for an ever-growing share of the marketplace. Read more…

The popularity of specialist property investment is underpinned by demand which is not set to subside. Factors such as the UK’s ageing population, rising student numbers and car sales growth have all attributed to the rise in investment in these key sectors.

Darren Yates, Head of Global Capital Markets Research, Knight Frank, commented, “With improving occupier demand, easier access to finance and a greater willingness to move up the risk curve, investors’ appetite for specialist property continues to increase. Indeed, for many investors, specialist property now forms an integral part of a core portfolio.”

There has been an upward trend in investors who are shying away from the more ‘traditional’ asset classes such as retail and offices. Investors are now looking to for asset classes which deliver stronger returns in an attempt to diversify their property portfolio.

Shaun Roy, Head of Specialist Property Investment, Knight Frank, commented, “The continued rise in investor interest in specialist property reflects the appreciation of these business critical assets which, when bought on sensible rent covers and on sound operational business assets, provide their owners with confidence in the durability of income. Moving forward to 2020 we expect to see this sector experience strong growth within the total market, and to become an even more significant part of investor’s portfolios.”

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