Apartment block

The development of apartment blocks has seen considerable change in recent years, driven by increased demand in the private rental sector. With one in five UK households now renting, increased appetite for longer tenancies and professionally managed apartment blocks has seen impressive growth in the Build to Rent and Co-living sectors.

Initial growth in the Build to Rent sector was largely confined to London, with the regions presenting some challenges for developers in terms of pricing and planning. However, schemes have begun to appear outside of London, particularly in Birmingham and Manchester, and more are in the planning pipeline. Rent collection showed itself to be broadly robust in 2020 despite the Covid-19 pandemic and is predicted to increase in 2021.

A large proportion of build-to-rent tenants are of working age and the sector is potentially vulnerable to post-pandemic unemployment, but if it can weather that storm there seems little reason not to anticipate continued growth. This would seem to be borne out by investment volume data published by Savills, which suggests that volumes achieved by October 2020 had already matched those for the whole of 2019.

Demand for Co-living spaces also looks set to continue, with CBRE reporting high occupancy levels despite the pandemic and healthy new booking levels even during lockdown. The difficulties associated with maintaining social distancing in communal spaces might have been expected to impact the viability of the model, but in the longer term demand is likely to be bolstered by wider lifestyle trends; a desire to increase connectivity with neighbours and establish collaborative communities.

We see one key feature of build-to-rent and Co-living schemes - the incorporation of technological and design solutions to meet the environmental, social and lifestyle aspirations of their tenants – as a catalyst to their ongoing success.

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