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SDL Group Outlines B2R Growth Potential

SDL Group Outlines B2R Growth Potential

SDL Group has outlined its continued commitment to the Build to Rent (B2R) sector, with a pipeline of existing contracts that will grow its existing portfolio six-fold by 2020.

                                                           Three-bedroom ‘Ellesmere’ style property let by rental firm DifRent

Based on current trends, the property specialist estimates that the new build sector will grow to 160,000-170,000 properties in England by 2019-20, with up to 20,000 of those properties being built specifically for B2R. SDL Group is on course to secure the letting and management contract for over 4,000 of these units in 2020, which will build its total B2R portfolio to over 10,000 properties across the UK, making it the largest provider of B2R services in the country.

Commenting on the potential for growth in the B2R sector, Paul Staley, director of PRS at SDL Group, said:

“B2R is a rapidly expanding market, with estimates valuing it at £50 billion by 2020. Large institutional property investors are increasingly being drawn more to the residential sector, which is currently seven times larger than the UK’s commercial property stock, with the gap set to widen further over the next few years.      

“However, there are several challenges blocking the entry of the large investors. Firstly, 80 per cent of all Private Rented Sector stock is owned by landlords with less than four properties, which means large portfolios aren’t that easy to find. In addition, the quality and condition of existing stock is difficult to assess and varies quite dramatically.

“Institutional investors are looking for stock that has predictable yields, with a regular and reliable income and predictable costs in the short, medium and long terms. Given the challenges incumbent in the Private Rental Sector, B2R is becoming the most obvious way for these institutional investors to enter the residential sector in any great volume.

“We are well positioned to capitalise on this growth having a proven track record in delivering letting and management services to a variety of B2R clients. Over the next few years, the plan is to cement our reputation as a market leader in the delivery of PRS services to developers, with a particular focus on the B2R market.”

                                                                                                    Paul Staley

Earlier this year, SDL Bigwood PRS and Estates Management was appointed by Sigma Capital Group as its exclusive letting and property management partner for a new Private Rented Sector fund. The deal formed part of Sigma’s plans to invest £100m in a drive to build 1,000 PRS units across England over 18 months.

This takes the total value of B2R contracts secured to over £450m (over 4,000 properties), with a number of others projects in the pipeline, which are due to be announced within the next few months.

For more on SDL Group, visit www.sdlgroup.co.uk.


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