Investment in Real Estate Alternatives to Rise by £9bn in the Next Five Years
The alternative UK property investment market will be worth £20bn in investments by 2019 according to property investment agents Jones Lang LaSalle.
The figures come following an investor survey conducted by JLL, in which respondents were asked what they anticipated how their investment interests would develop over the next five years. The results suggested that investments offering an alternative to traditional real estate options are becoming increasingly favoured amongst institutions, with respondents identifying the higher returns as a reason for their increased interest in this sector.
Alternative Property Investments
The company has predicted that this interest, particularly from corporate and institutional investors, will increase by almost double in the next five years. Alternative investments such as student accommodation, care homes and hotels are currently expected to achieve £11bn in investments this year, with predictions suggesting a £9bn investment increase in the next five years.
Of those asked, 90% of the survey respondents indicated that they were planning to focus more of their investment capital in these alternative asset classes in the coming year. Those looking to increase the size of their investments in this area were on average looking to achieve a 9% increase in the next five years.
An increasing number of institutions have looked to alternative property investments as a source of sustainable income with excellent yields and proven profitability. Real estate alternatives have seen a notable rise in investment with the student accommodation sector alone due to achieve £4bn in investment by the end of this year.
Chris Ireland, UK Chairman and Lead Director of JLL, explained that, ‘Alternative asset classes are becoming increasingly attractive to institutional investors, with a particularly positive outlook forecast for the next five years … it’s likely that many of these assets will break out of the alternatives bracket and become a more mainstream choice for investors.’
Student Accommodation, Care Home & Alternative Investments
With the UK’s alternative property investment market on the rise, now is an excellent opportunity to look at some of Principal International’s excellent investments.
Student accommodation development The Grand Mill is already operational and fully tenanted, offering investors immediate income. Located in Bradford, it offers investors up to 8% NET rental return for an investment of just £39,000. This fully managed property investment is located just 0.4 miles from the University of Bradford and Bradford College, making it ideally placed for students in the area.
Bury Football Club’s unique car parking investment offers investors a 9% NET return assured for 24 years, for the low capital input of just £9,995. Located directly outside of the club’s home, The JD Stadium, the spaces will be fully managed and operated by the club.