Birmingham BTR Is Catnip To Investors

Birmingham will be the UK’s top city for attracting private rented sector investment over the next five years, according to global property consultancy Knight Frank’s latest research.

Knight Frank surveyed 43 leading investors with a combined £32B already invested across the student accommodation, investment-grade PRS and senior living rental sectors. The respondents identified the cities where they saw the biggest opportunities in each sector over the next five years.

Birmingham is the best opportunity for PRS by quite some margin, according to respondents, driven by regeneration and infrastructure improvement.

"Our investor survey shows that Birmingham is expected to outperform all other UK cities over the coming five years, with London, Bristol and Leeds closely behind,” Knight Frank Birmingham Managing Partner Ashley Hudson said.

“Birmingham presents an incredibly compelling investment opportunity for PRS, with a rapidly growing population, significant infrastructure and transport improvements and a structural undersupply of new-build PRS product."

After a slow start, the Birmingham BTR sector has reached an interesting stage. The first three major PRS schemes are now taking their first tenants. These include The Forum which will deliver 343 units on Pershore Street, the first phase of Exchange Square totalling 618 units, and the Landsdowne at 207 units on Hagley Road.

Another wave of development is coming, including the 259-unit Lionel House scheme in Lionel Street, which has been forward funded by Aberdeen Standard. Early enabling works are already underway, and the 14-storey development is expected to be completed in the summer of 2021.

Including these three schemes there are approximately 4,500 units either built, under construction or under offer from a build-to-rent perspective. At present this means a Birmingham exposure for just under half of the institutional grade investors that are known to be active in the market. The challenge for the remaining funds is to find their first success in the city, while existing funders will be seeking their second acquisition, Knight Frank said.

The combined value of the sectors in the UK in 2025 is forecast to be £146B, the firm reporterd.

Bisnow's Birmingham BTR update will be on 11 September, and you can register here.