Perspectives 2019

Investing in our future Like the rest of the world, the UK’s demographics are changing. As older people grow in number and are joined by new generations with their own needs and priorities, we examine how investors are changing their strategy to include alternative real estate in their investment portfolio. COVER STORY Over the last decade, the real estate sector has seen increasing investment into alternative sectors such as hotels, student accommodation, residential and healthcare. In 2018, alternative sectors accounted for 28% of all real estate investment – an all-time high, and a huge jump from just 5% in 2009. A major driver of this trend is interest from foreign investors, who are often as well informed as domestic investors about real estate opportunities in the UK. In fact, 57% of alternative real estate transactions last year involved a foreign buyer – one of the main reasons being that investors want exposure to future real estate demand that is driven by demographic trends. The makeup of UK society is changing, both demographically and economically. People are living longer, and this trend is only likely to increase over the next 10-20 years – a timeframe in which the population aged over 85 in England’s regions is set to increase by one million. At the same time, the oldest members of the millennial generation will begin to reach middle age, but perhaps with fewer financial assets than their parents – while a new “Generation Alpha”, born entirely within the era of social media, will come to adulthood. In this article, we’ll look at some of the major demographic trends involving older people, millennials, and the next generation – as well as the opportunities they present to real estate investors. By Greg Mansell, Head of UK Research & Insight Alternatives CUSHMAN & WAKEFIELD 03 COVER STORY