Swedes Hunt For Capital And Opportunities As BTR's Spring Thaw Begins

Swedish build-to-rent giant Heimstaden has raised £265M in new equity from UK-based Greater Manchester Pension Fund and existing shareholders.

The Malmo-based business has a rental portfolio valued at £27B, including around 158,000 homes across nine northern and central European countries. 

The move is part of a fundraising intended to strengthen its balance sheet, and it helps fund an £805M bond buyback as it grows its UK platform.

It also comes as the UK BTR scene begins to unfreeze after a difficult winter. The final quarter of 2022 saw construction starts 24% lower than the same period in 2021 at just 15,600 units.

Heimstaden's UK projects include the 752-unit Soho Wharf in Birmingham. The first phase of 99 apartments and 24 townhouses was completed last week, with the third phase due to complete in June.

It is also funding Platform’s 464-home Edinburgh residential project after a £124.4M deal.

The Greater Manchester Pension Fund investment may not be the last it makes, hinted Heimstaden Head of Capital Raising and Client Relations Steen Lønberg Jørgensenin.

“The new equity shows our shareholders’ strong commitment to the company, a continuous support that has enabled recent years’ growth. We share a commitment to sustainable and responsible investments on behalf of all stakeholders and are looking forward to developing our relationship even further,” he said.

Analysis published last month by Savills and the British Property Federation suggested the BTR market growing steadily, although at a slower rate than over the last five years. The development pipeline rose 14% in 2022, to 243,000 units, a slackening of pace compared to the 28% average rise every year since 2017.

GMPF is one of the largest local government pension schemes in the UK, managing £28B for the city’s 10 local councils. It has a long record of bold moves into the local and national property market.