A lack of change in CBRE’s residential property investment yields for September shows the stability of demand for the PRS product, but also the frustration that rental developers are feeling in the post-Brexit market.
Many were hoping that land values would decline and distressed stock would become available after the vote, which would in turn push out yields.
However, “that has just not happened yet,” says Jason Hardman, head of residential valuations at CBRE. “Whether it happens in London, time will tell – but not at the price point these guys are interested in.”
Notable deals for the quarter include LaSalle Investment Management completing on Greengate in Manchester for £110m, M&G agreeing the £28m forward funding of Port Street in Manchester and Europa Capital and Addington Capital buying Velocity Village in Sheffield for £37m.
Hardman added that there could be further pressure on pricing. “There are a number of funds that have had successful fund raises, that have got even more money, so there is more pressure to spend it.”
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