There is currently £27.7 billion worth of equity targeting the UK Build to Rent (BTR) sector over the next five years, according to CBRE’s Build to Rent Equity Barometer and the property consultants believe that there is potential for some of this capital to be attracted to invest in Build to Rent in the Irish market.
The research suggests that almost half of the capital chasing Build to Rent opportunities in the UK market originates from North America. With the main constraint for investors continuing to be a lack of available stock and the ratio of deployable equity to marketed stock currently at 14:1, CBRE say that some of these investors are now looking for opportunities in the Irish market considering the well-publicised housing shortages prevailing in cities such as Dublin.
There has been a notable increase in appetite in Build to Rent from international institutions of late. Whilst London has traditionally been the focus of investors’ attention, the UK’s regional cities are becoming increasingly prominent as American funds begin to explore the market and demonstrate their willingness to move higher up the risk curve in regional cities that offer a strong investment case. Therefore, it is logical that if investors are willing to look at opportunities in regional UK, they are very likely to consider opportunities in Ireland where supply shortages are particular acute. Indeed, CBRE say they have seen increasing evidence of this trend over recent months.
“We are urging the Irish Government to facilitate the delivery of the Build to Rent (BTR) concept, which is common in other jurisdictions and which has the ability to deliver scale quickly. Build to Rent is set to become increasingly popular in the Irish market with a significant weight of capital looking to invest in this sector and facilitate much-needed delivery. In 2016, Build to Rent was a $250 billion debt and equity market in the US. Institutional investors from across Europe and North America are looking for new markets to deploy their capital in the Build to Rent sector. CBRE have recently launched a Build to Rent Barometer to monitor both domestic and global Investor interest in Build to Rent across the UK and we firmly believe that some of this capital will find its way to Ireland considering the scarcity of housing in the Irish market at present.” said Tim MacMahon, Director, Development Land.