There has been a significant improvement in the returns available on regeneration property
in 2010 compared with the previous year, according to the latest research. The IPD and Savills' Regeneration Indices Report 2011 found that capital value growth was the main factor behind the rise.
Residential regeneration projects
were the best-performing sector, beating industrial and office schemes, with the analysts noting it shows "the long-term benefits of holding this asset class". Indeed, the study commented that property investments in this kind of development are unlikely to show short-term gains, but will offer rewards in years to come.
Meanwhile, rental growth in this area improved during 2010, but is still lower than the all property average, the research revealed. However, the report commented: "The fundamentals of regeneration property remain sound, enjoying stronger, less volatile income growth."
Last month, Savills predicted that by the end of 2016 one-fifth of all UK households will be renting their homes. Prospects for future rental growth remain strong as a result, the firm noted, adding that Greater London properties are performing particularly well.
- Thursday 30 June 2011