Multifamily investment sales are surging in the United Kingdom.
The sector is on pace for roughly $5.2 billion of investment this year, according to the Wall Street Journal.
Historically, only a small share of U.K. residents were renters. But rising home prices mean younger people are renting for longer, according to the report.
Government data released February found that 1 in 3 people ages 35 to 44 rented their homes in 2017, compared to just 1 in 10 in 1997.
Greystar is among the investors betting on growth in the sector. Since 2013, the South Carolina firm has amassed a $5.3 billion portfolio of multifamily units, and looks to nearly double its count in London to 10,000 units by 2022.
Currently, around a third of households rent in London, but CBRE projects that share will double by 2030.
Changes in housing policy in the 1980s set the stage for the multifamily investment boom, the Journal reported. Specifically, changes to rent control laws allowed landlords to raise prices and evict non-paying tenants.
The rise in multifamily investment comes amid a terrible year overall for commercial real estate investment, brought on by the pandemic. The third quarter saw about half the investment volume as is typical for the period in years past. [WSJ] — Dennis Lynch