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Private investors bullish on UK real estate outlook

Property fund graphsPrivate investors and developers remain bullish on the outlook for UK real estate despite ongoing economic uncertainties, according to research from Investec Real Estate.

Investec’s private client sentiment survey looked at the attitudes of UK real estate investors and developers towards the sector, with data gathered from 110 individuals with a total net worth of £12.2 billion.

The residential sector performed extremely strongly during Covid, buoyed by a pause in stamp duty taxes imposed by the government, and 70% of respondents stated that five year UK residential capital values would be either higher or significantly higher than the 13.1% rise predicted by real estate firm Savills.

London’s residential market was seen as a particularly attractive market for real estate investment, with 91% of private clients expecting prime central London returns to increase in the next five years.

However, only 42% of investors saw retail as particularly appealing over the next five years,indicating that they are considering returning to the sector. Office space, which was hit especially hard by the pandemic, showed signs of a bounce back in investor sentiment, with 84% of investors and 80% of developers expect to be involved in the sector over the next five years.

William Scoular, head of private client real estate lending at Investec lEstate, said: “It is exciting to hear insights from this traditionally discreet group - and encouraging to see that they retain their capacity to innovate and speculate ahead of the rest of the real estate world.”

Sustainability was also marked as a top agenda point for virtually all respondents, with 99% of respondents stating that they faced external pressures on the topic of sustainability.

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