Investment into specialist property rose 40.4% year-on-year in 2017, driven largely by the private rented sector and hotels, according to Knight Frank’s 2018 specialist property report.
Within the past two years, PRS has grown into the biggest specialist sector in UK commercial property, accounting for £6.3bn of the £17.7bn of specialist investment last year.
Hotels attracted £5.5bn of investment, below a high of £5.9bn in 2015 but above the 10-year average of £2.4bn.
A third of investment into specialist property came from overseas.
Those investors were particularly drawn to student housing and hotels, where they made up at least 36% of all investment in those sectors.
Shaun Roy, head of specialist property investment at Knight Frank, said: “The human factor – the end user demand that ultimately drives the sector’s performance – is not in question.
“Demographic trends can be reliably predicted and, combined with expert market knowledge, provide a solid footing for demand projections.
“We continue to see strong and sustained demand for specialist property, driven by the desire for durable long-income investments to good convenants.”
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