Student homes and healthcare properties, as well as hotels, will be at the forefront of a wave of investment set to come into British property this year, a new report from the property consultancy Knight Frank has predicted.
In the past year student accommodation and healthcare property investment totals have benefited from rising student demand and the closure of many public sector care homes respectively, and this looks set to continue, with these two asset classes joined by alternative commercial properties and hotels at the top table.
£14.3 billion worth of investment in 2016
It said that in 2016, the four property types should be able to combine to bring in investment of some £14.3 billion. This would be a full ten per cent higher than they collectively managed to deliver in 2015, Knight Frank said.
But what’s behind this shift towards these four assets in particular? According to Knight Frank, it’s the fact that buyers are now starting to see more niche property types as safer investments that may not offer the highest returns, but do promise a stable and consistent income over a long period.
People are now more prone to look at the long game after seeing how quickly residential property can rise and fall in the aftermath of the recession in 2007. While the peaks can often be high, the troughs are low, and many are, as a result, looking for safer ways to invest their money.
Record year for alternative assets in 2015
Shaun Roy, head of specialist property investment at Knight Frank, said: “The market has changed. Investors’ primary focus now is the longevity and durability of their income return and the specialist sectors are ideally suited to offer this style of investment product to the market.”
Commercial property’s changing face has shown just how much people are now looking towards new places to spend. Knight Frank said that in 2015, 18.3 per cent of commercial property investment went into the alternative market, with overseas investors in particular taking an interest in spending in these types of asset.
Knight Frank believes this will continue to grow following a record year for alternative assets in 2015, adding that we should see a ‘wide spectrum’ of investors putting money into these types of property for the rest of the year.