Institutionally held residential having a growth spurt

The residential sector in the MSCI Inc. Quarterly Index performed the least negatively, with a -1.1% total return in the past 12 months after a -3.7% return in the 4th quarter.

The sector in the UK was once small, accounting for only 1% of the index a decade ago, but has since grown and now constitutes over 6% of the MSCI UK Quarterly Index, with £8.5bn in stock (including build-to-rent and student housing).

What could be its future size? According to MSCI’s market size estimate, the overall property sector in the US is 5 times larger than that of the UK, and its residential sector is over 15 times larger than the UK’s. Based on this and current trends, a reasonable expectation would be for the UK’s residential sector to double its weight in the MSCI UK Quarterly Index within the next five years.