Investor confidence throughout Covid and Brexit has swung radically between despair and hope. Covid rocked the foundations of our built environment, economy and businesses, causing significant variation between performance in industries and investment types.
We’ve seen Covid extremes such as a Coventry shopping centre being auctioned in February 2021 for £4.85m, having been valued eight years earlier at £37m, and Peloton’s value rising 440% in 2020 only to drop by 76% in 2021.
Now, with the Consumer Price Index hitting 5.4% by the end of 2021 – the highest since 1992 – and the knock-on effect from sanctions due to Russia’s invasion of Ukraine, investors are scrambling to hedge against inflation.
After the woes of the pandemic-induced slump, investor confidence made a cautionary return in the second half of 2021, capped by potential concerns over new Covid variants and Brexit. In this period we saw investor activity through Brickowner return to pre-Covid levels, reflected in the amounts invested per investor increasing.
Against a backdrop of residential spending sprees fuelled by Help to Buy, supply chain constraints of building materials linked to Covid and a stuttering end to lockdown, there has been recent strong evidence of global institutions backing the longevity of UK property post Brexit and Covid.
This includes Google’s $1bn London office purchase, Knight Frank’s prediction of £60bn of foreign investment in London offices over the next five years and L&G’s Managed Fund making acquisitions in the office, retail, leisure and industrial sectors.
The UK property market clearly has unique selling points to attract investors from around the world, and confidence appears to be rising. Yet, options for a private investor to access the UK property investment market are limited and expensive. This could be linked to investors wanting exposure to UK property as an inflationary hedge and not wanting to do this via listed property funds due to the cash drag caused by these funds being obliged to keep large cash reserves of 20% or more to deal with possible redemptions.
Investors appear to see the UK as the right place for growth, which is testament to the resilience of the market. But these are not normal times, and reading or accessing the UK investment market is not straightforward for the private investor, as most closed-ended offline funds have high minimum investments, which are out of reach for most investors.
Harnessing technology to streamline the investor onboarding and management process, as we do at Brickowner, gives investors a simple way to access and invest in property with more reasonable sums and helps the property asset managers and developers by relieving them of the administrative burden of manually onboarding and managing investors.
Activity on our platform gives us interesting insights into investor sentiment. As people want to move money into real estate, we are well placed to support investors and asset managers to make investing in property easier, quicker and better.
Fred Bristol is chief executive of Brickowner