An Alternatives View

Insights into the UK’s alternative assets

Rapleys latest report explores 16 alternative asset classes and the opportunities they offer to those looking to find unexplored value for their property portfolios.

Finding the value in Alternatives

Despite challenging market conditions, Alternative properties have remained remarkably resilient, offering significant opportunity for those who know where to look. However, with an eclectic variety of industries in the mix, it is a complex sector to navigate.

Rapleys’ inaugural Alternatives report brings together decades of unique knowledge and market expertise across 16 alternative property industries that we advise in. From the more established to the emerging, we assess the performance, outlook, themes and trends of each market to help clients find and unlock the right opportunities, optimise performance and manage risk.

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Industries Explored

A diverse array of 16 Alternative asset types has been brought together for the first time to guide property stakeholders on, not just the property fundamentals, but also the complex environments, macro and micro issues and pressures and policy that lie behind each industry. Review our summary of the areas covered or download the full report.

Automotive & Roadside

Car Dealerships, Drive Thrus, Petrol Stations and Self Storage are outperformers in this industry and are seeing significant growth across both capital values and rents. Covid meant Drive Thrus benefited from a “contactless experience” and Self Storage from people wanting to maximise their space at home. Both these have the strongest outlook while the upward trajectory of the sector overall is expected to continue.

Other

Education has been under the spotlight thanks to asbestos and the RAAC crisis, albeit in the long term these should power better investment and refurbishment. One challenge will be the party politics threatening the viability of some private schools. Churches have seen declining worshippers which has meant a major increase in surplus church transactions. With church assets, reasonably priced value can easily be added by those willing to overcome the challenges and nuances of these properties.

Residential

There is a mixed picture for Affordable Housing, Build to Rent, Care Homes & Retirement properties. BTR has seen huge growth but with a lot of competing development, the pace of this is likely to be curtailed. Care Homes & Retirement have outperformed with post-Covid changes driving performance. The Affordable Homes sector has been under the spotlight with demands for improved health & safety, planning reform and better incentives, however, in the long term a positive performance outlook is anticipated.

Retail & Leisure

Foodstores and Sport have had mixed fortunes. With political uncertainty has come a lack of confidence by some of the larger retailers and investors who want more clarity on a General Election and the Government make up before they make their next moves. However, specialists and independents are thriving in the right places and with the right tried and tested model. In the sporting world the post-Covid rebound, driven by fans looking for a more physical, sensory experience, has been highly beneficial, driving more investment and improved hospitality and customer experience.

Science and Health

Vets, Labs and Dentists have primarily been a success story with some bumps in the road but with positives that remain thanks to the focus on health and animal care as well as science post-Covid. In 2022/2023, Labs were a success story with an influx of investors into the industry. While this has potentially peaked, the picture is positive long term and there are significant opportunities to be found for Vets and Dentists with M&A and competition driving change and the rise in repurposing and occupying high street assets.

Transport & Infrastructure

Transport & Infrastructure projects offer major challenges and opportunities across the UK. A key opportunity is overstation development that will drive regeneration and value. Data Centres and Renewables are ripe for growth with both facing huge demand pressures. However, they need planning reform to support delivery. More Data Centres are needed to support rising connectivity demands. Renewables face similar issues with understanding and support often lacking at planning and community level.

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“This is the first time such a diverse array of assets has been brought together to guide property stakeholders on these complex environments with their own bespoke macro and micro issues, pressures and policy on top of real estate requirements.”

Justin Tuckwell, Managing Partner

“We have seen increased interest by investors in alternative and niche assets as they seek value add opportunities and to diversify their portfolios. There is huge growth to be unlocked if you know where to look.”

Rebecca Harper, Head of Investment