In real agency Knight Frank’s latest report ‘Breaking the shackles: the rise of BTR’, the firm discovers that the sector is receiving growing interest from local and global investors.
The expansion of the Build to Rent market across the country is reflective of its success.
Partly because of this, investors are seeking greater exposure and opportunities within the living sectors, which is led by Build to Rent and followed closely by student accommodation and rental retirement living.
Knight Frank finds that, based on the most recent ANREV survey of global investor intentions, residential is the most sought-after sector for global investors targeting the Asia Pacific region, for the first time.
“Rents have exhibited a high degree of correlation with fluctuations in inflation, in contrast with other sectors like office and industrial where the rental cycle has fluctuated more widely depending on the prevailing supply- demand dynamic.”
Knight Frank
The shift to living sectors is part of a wider change from major institutions globally to focus predominantly on core investment strategies in 2023, and commensurately reduce their allocation to value-add and opportunistic strategies.
Survey evidence from the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) highlights this shift down the risk curve in response to a more uncertain global economic outlook and cyclical correction in other sectors.
The tilt in strategic approach to focus on core investments stands in clear contrast with the late-cycle approach evident from 2018-20.
Defensive investments were assigned a low priority as investors pursued a more risk-on approach.
