Alternative real estate sectors now account for almost half of all UK and Ireland real estate investment activity, as investors increasingly target infrastructure-style income streams and defensive asset classes, according to research from CBRE.
The firm said investment into alternatives including living, healthcare and data centres totalled almost £30bn in 2025, increasing the share of alternatives within UK and Ireland real estate investment from 15% in 2016 to 44% by the end of last year.
While that share fell slightly to 36% in the first quarter of 2026, following a surge in healthcare platform deals in late 2025, CBRE said the broader trend reflects a structural shift in investor behaviour as capital increasingly converges around real estate and infrastructure.
Colin Thomasson, head of UK investment properties at CBRE, said investors were looking beyond traditional commercial real estate sectors in search of more stable and resilient returns.
“We’re seeing this shift for a number of reasons,” he said. “Firstly, investors are looking to diversify. These assets offer inflation protection, stable and often index-linked income streams. They also boast durable demand drivers, often with the provision of essential services, as well as low volatility and support from government policy objectives.”
CBRE said structural trends including digitalisation, decarbonisation, demographic change and deglobalisation were reshaping long-term demand for infrastructure-adjacent sectors.
Growing demand for AI and cloud computing is increasing pressure on data infrastructure and energy networks, while demographic trends continue to drive investor interest in healthcare and residential sectors.
The firm said investor appetite for alternatives was continuing to strengthen across Europe. According to CBRE’s latest European Investor Intentions Survey, 69% of investors in 2026 intend to allocate capital to at least one alternative sector, up from 62% a year earlier.
Investor interest in social and economic infrastructure specifically rose from 10% in 2023 to 17% in 2026.
“For real estate investors, this is an opportunity to shape long-term demand for housing, healthcare and care assets, as well as improve income security,” Thomasson added.
CBRE also linked growing investor demand to the Mansion House Accord agreed in 2025, which committed UK institutions to allocate at least 10% of defined contribution pension funds into private markets by 2030, including a minimum 5% allocation to UK private markets.
Tasos Vezyridis, head of research for UK and continental Europe at CBRE, said the shift was broadening the buyer pool and intensifying competition for high-quality assets.
“Our research shows us that the buyer pool is broadening, creating pricing tension, competitive bidding processes and greater certainty of execution,” he said.
CBRE’s UK Long Income Index found infrastructure-overlapping sectors delivered average annual income growth of 3.8% over the past decade, matching more traditional sectors such as office, retail and industrial, but with significantly lower volatility.
“The rising digital and demographic requirement for these assets will be aided by the evolution of sources of capital as investment into UK private markets increases,” Vezyridis said.
“The impact for UK real estate markets is that more capital will be targeting assets with predictable cashflows, lower volatility, strong governance and transparency.”
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