Investec Real Estate has launched its inaugural The era of real estate innovation: The 2022 private client sentiment survey, gathering the views of 110 private client property investors and developers with a total net worth of £12.2 billion that invest their own wealth into UK real estate.

The findings reveal that despite recent and current uncertainties, private investors and developers are extremely bullish on the outlook for UK real estate, as they sense an opportunity to leverage their nimbleness and ability to think creatively to unlock innovative opportunities that are beyond the reach of corporates and institutions.

Whilst the residential sector continues to look attractive, private clients see significant opportunity in those sectors that fell out of favour during the pandemic, particularly retail and office.

The report stated that London is the most appealing location for UK real estate investment, with 97% of respondents seeing London as very or slightly appealing, significantly ahead of other UK cities.

‘Resi for sale and rent’ are the asset classes viewed as the most appealing from an investment perspective over the next five years. 42% of investors see retail as particularly appealing over the next five years, while 93% of developers expect to be involved in the sector in the next three years.

Meanwhile, more than three times as many private clients believe that an opportunistic real estate strategy offers the best relative risk adjusted return today (29%) versus three years ago (9%).

In addition, 69% of private clients believe a VAT regime that penalises refurbishment over new builds is an environmentally unsound policy.

Investec Real Estate says the report’s findings also reveal just how far sustainability has risen up the private client agenda, with 99% of respondents saying they faced external pressures on the topic. Additionally, 89% say the UK planning system has become more, rather than less restrictive.