Alternative asset classes such as life sciences, student accommodation and Build-to-Rent are expected to show the best financial performance this year, according to a new industry survey of BPF members, which was conducted by Ipsos in partnership with Grosvenor.

The results, gathered from over 100 UK property developers, funders and advisers, forecasts a split between ‘alternative’ and ‘traditional’ real estate asset performance over the next twelve months.

When asked to identify which three asset classes would outperform in 2023, almost half of respondents (47%) identified life sciences, 42% selected student accommodation, and 41% chose Build-to-Rent. Likewise, when discussing top three investment plans over the next five years, 41% planned to grow investment in Build-to Rent, with 30% upscaling in life sciences and 31% targeting logistics.

In contrast, respondents were less confident in the short-term performance of traditional workspace. Only 10% expected co-working and flexible office space to perform well, falling to 8% for London and just 2% for regional offices. Other sectors tipped to fall short of expectations included hotels (7%) and retail (5%).

"The property sector is facing a perfect storm of pressures including cost inflation [and] increased cost of debt,” so it is no wonder those surveyed are looking to emerging assets as a way to diversify beyond traditional workspace and retail.

It will be interesting to see whether this shift towards alternative assets continues. The UK property industry is inherently long term in its outlook. Is this trend just a reflection of the cyclical nature of real estate? Watch this space.