Investors should target Bristol due to its culture and expected population growth in the next 10 years, BNP Paribas Real Estate said.
The city is home to a number of creative and digital industries, as well as financial services, which should attract newcomers.
It currently has a higher-than-average proportion (20.8%) of households in the private rented sector, whilst home ownership is below the national average, at 58.8%.
BNP Paribas sees the region as a good one for build-to-rent firms. There are currently around 2000 build-to-rent units currently in the pipeline, most of which are set to complete in 2024.
Joshua Gunn, head of Bristol office, BNP Paribas Real Estate, said: “Bristol has a wonderful sense of identity, one of the key factors that makes it such an attractive place to both live and work.
“The city and surrounding areas is one of the UK cultural and innovation hotspots, and this is translating into an increasingly attractive BTR proposition.
“Industries are thriving, the population in booming at a rate above the UK average, and wages are highly competitive.
“Even the pipeline of BTR will not be sufficient to satiate the thirst of market demand where more than a fifth of households rent.
“All signs point to Bristol as the city that should be top of investor’s watchlist for opportunities going into 2022.”
Bristol house prices average at 280,000, though the ratio of house prices to earnings in Bristol is also greater than the average for England, at 8.59 (ONS).
Rebecca Shafran, alternative markets research associate director, BNP Paribas Real Estate said: “The rise in the Build to Rent sector outside of London continues to be in the spotlight for investors who are keen to identify new opportunities in and around regional cities.
“Bristol certainly makes an interesting proposition for those investors, where the fundamentals of strong demand and short supply are underpinning sector growth.
“The city also benefits from its reputation as vibrant, aspirational, and with a fierce sense of community.
“Post pandemic, people are reassessing their priorities and the ability of Bristol to deliver on career ambitions and work/life balance is huge upside factor.”