How living sectors could outpace other mainstream real estate in a decade

So-called ‘beds for rent’ sectors in the UK are becoming a preferred allocation choice for investors over offices and retail, according to findings published by Investec.

Residential sectors such as retirement living, private rented and co-living are increasingly becoming a core part of an investor’s portfolio in the UK, as some of the more traditional sectors like offices, hotels and retail continue to bear the consequences of the pandemic.

According to bank Investec’s Future Living II report, there is expected to be a five-fold increase in the number of investors committing more than £1 billion ($1.3 billion; €1.1 billion) to the living sector as a whole in the next five years.

About 85 percent of the institutional investors polled by Investec are expecting to either increase or maintain their portfolio allocation towards the living sector – essentially encompassing residential properties for rent in the UK – over the next decade. In comparison, 46 percent and 58 percent of the respondents want to allocate to retail and offices, respectively.

The investment bank interviewed 52 global institutional investors representing £514 billion in assets under management. The charts below highlight the key findings of the report.