Bouncing back from COVID

Notwithstanding the stellar performance of distribution and logistics – with the sector also performing well across Europe, with Q1 take-up 30% higher than the five-year average – retirement living, the private rented sector and build for sale all saw strong increases in appeal in 2020-21.

The healthcare and life sciences sector, now found appealing by 82% of real estate professionals, is a clear focus as a result of the pandemic and the renewed importance of science and technology.

Retirement living is a particular hot spot, its appeal up by 21% on last year to 83%, with global investors such as Goldman Sachs (through its backing of Central London luxury over-65s developers Riverstone), Legal & General and AXA IM Alts all making large commitments to the sector. A wealthy ageing demographic and the importance of high quality, high tech accommodation where health and wellbeing have never been more important, provide the post-pandemic context for this shift.

Other ‘beds’ sectors including residential and PRS have also continued their rapid rise in appeal over the pandemic period. Residential is popular among 70% of our respondents, with PRS up for a second consecutive year to 74%. With home likely to be the part-time workplace for many of us for the long-term, the demands and expectations for advanced technology to enhance the experience will continue to grow.

Sentiment towards hotels and leisure has seen a striking improvement over the last 12 months, with 32% saying they are an appealing investment prospect compared with a dismal 9% at the depths of lockdown – and pre-vaccines – last year.

Student accommodation has also seen a near doubling of its appeal in the last year. When students appeared to be facing permanent online learning, and with overseas students very little chance of returning to the UK, 24% saw the sector as appealing. That has now risen to 46%.

Please rank the appeal of the following asset classes on their level of appeal (Real estate sector)