Which real estate sector pays the most?

The report heralded good news for much of the industry, as 70% of respondents’ pay increased in the last 12 months, which is up 26% on the previous year. 

The build to rent market is predicted to experience explosive growth in the coming years in the US, backed by major investors with billions of dollars at their disposal. 

It is followed by self-storage and hospitality and leisure as the asset classes with the highest average salary globally. Self-storage is going through a resurgence, caused in part by high housing costs which is making it cheaper to invest in self-storage rather than move to a bigger home or extend your current home for extra space. Self-storage units are also cheap to build and operate, when compared to other building types. 

“Multifamily or build to rent is a fast growing and evolving market,” says Nicholas Carman, partnerships director at Macdonald & Company. “As such, its popularity with major institutions and developers leaping to meet the demand has caused salary inflation, above other more traditional asset classes.” 

“The UK experienced significant salary inflation over the course of the last two years, with salaries jumping double digits in consecutive years,” says Peter Moore MRICS, managing director at Macdonald & Company. 

“The demand for key skills remains high around the world. We asked the global real estate population if they expected a skills shortage to happen in their region and 61.7% said yes, this was ‘likely’ or ‘most likely’. In the Middle East and North Africa this figure was even higher at 73.3%. While there are often key influences to pay and rewards, including tax incentives, we can expect to see salaries continue rising as demand for talent outstrips supply.”

When you also consider the report’s finding that men are, on average, given double the annual bonuses of women, it paints a picture of an industry with plenty of work to do on pay equality. On average, men receive bonuses of $14,000 compared to $7,000 for women. These headline numbers on salary and bonus aren’t broken down by job type and seniority, but a lack of women in directorial and board-level positions points to another set of issues.

“One of the reasons for the gender pay gap is that those earning the highest salaries in the most senior positions are usually male – 90% of the most senior positions are occupied by male respondents,” says Carman.

“Despite this stark contrast, there are positive steps happening. In the C-suite, the gap is shrinking. And in graduate hiring, the real estate industry is recognising it needs to do more – we have recorded female entrants to the sector being paid 8% higher than male respondents in the UK.” 

However, not everyone places the same importance on salary level. In Middle East & North Africa (MENA), 44.6% of respondents valued this highly while in Africa only 22.6% did. 

In the UK, 44.1% said a flexible location was one of their most important perks, a long way ahead of Asia, where only 23.9% valued it. And in the US, it seems respondents don’t worry too much about appreciation from their line manager, as only 9.8% valued this compared to the global average of 23.3%.

“Work/life balance replaced salary as the most valued benefit of employment in 2020 and has stayed at number one in the US and UK for the last three years,” says Carman. “We have seen salary drop down to third in the UK behind flexible hours, showing the popularity of something that became more established during the pandemic.” 

Moore says: “We have been asking this question for four years – in 2021 during the peak of the pandemic respondents voted in a large majority for greater flexibility. In the UK, 74.3% opted for greater flexibility rather than a 5% salary increase. However, today this has almost completely reversed with the global average being 62.9% opting for a 5% salary increase. 

“Our read is that many in the real estate industry today already have greater flexibility in when and where they are working.”