The proportion of investment volumes made up by alternatives amounted to 28% of the £29.4 billion invested into UK commercial real estate this year according to Savills.
There’s been an increase in appetite for the alternative sector in the 2019 as investors look for more stable income streams against a backdrop of political uncertainty. A total of £8.3 billion has been invested into alternatives this year including PRS and student housing. This is particularly interesting when compared to other asset classes; in the same timeframe London offices has recorded £6.4 billion of investment, UK industrial stands at £3.9 billion and UK retail £3.1 billion.
These sectors have proven particularly popular for investors, with more stock available on the market and these assets providing long term income stream. Domestic investors have accounted for the lion’s share of investment into alternatives notes the firm, with just under £5 billion spent.
James Gulliford, joint head of investment at Savills, comments: “Alternatives are rapidly becoming Conventionals as political uncertainty and Brexit continue to delay decision making in traditional markets. In response investors are turning to assets with operating models that have both perceived structural support and more stable income prospects.”
