UK Build to Rent - Performance in a Pandemic report
The Coronavirus Pandemic that has caused such tragic loss of life and an immense economic dislocation has also caused all of us to reappraise what we thought we knew about investment, and certainly about Real Estate. We manage assets in a range of different sectors at Gatehouse Bank, but we have been struck by just how well our two Build to Rent (BTR) Funds have performed during, and immediately following, the lockdown period.
In these challenging times, both Private Rental Sector (PRS) Funds have performed strongly in rental collection, occupancy, new lettings, dealing with arrears and Gatehouse has managed to complete a new investment BTR transaction. We have set out below some key features that make UK BTR a defensive asset class in uncertain times.
The damaging impact of the Pandemic on the commercial property sector has been well documented. In our view and experience, BTR assets have conversely performed relatively well. Residential accommodation is a necessity, not a luxury expense item, and there are significant credit risk diversification benefits exhibited due to the granularity of BTR schemes, which is a unique characteristic of the sector.
Looking across the sector there have been short-term effects related to delays and defaults in rental payments from workers suffering economic hardship, however, the experience from our existing funds is that this has been largely mitigated by government support.
Read the full report here.