L1 Capital believes the outlook for U.K. residential property (excluding London) offers a compelling opportunity. The combination of high rental yields, low borrowing costs and attractive long-term supply-demand dynamics makes for an attractive investment case. The investment strategy is centred on purchasing large blocks of day-one income generating, tenanted apartments in Tier-1 U.K. cities (such as Birmingham, Manchester, Leeds, Nottingham and Newcastle).
Investing in the U.K. property market provides a highly predictable stream of distributions to investors supported by rental income. U.K. rental prices (U.K. nationwide average) has proven to be stable and resilient to economic downturns and has not experienced a year of negative growth to date.