Place Your £1B-Plus Bets On BTR Growth: London Or The Regions?
Which promises the best returns in the build-to-rent sector: London or the UK regions?
A £650M-plus injection from two Canadian pension schemes will create a new £1.5B UK build-to-rent platform for Long Harbour focused on London and the South East.
The move comes just days after Australian investor Macquarie’s new £1B UK build-to-rent venture bet on the regions, landing its first big site in Birmingham.
The as yet microscopic UK multifamily rental market is also in two minds. According to Savills/British Property Federation data there here are now 152,000 build-to-rent homes in the UK, either built or in the pipeline. This includes 76,400 in London and 75,700 in the regions.
Goodstone Living, Macquarie's new BTR platform, has acquired the £130M development piloted through planning by Eutopia Homes. The site at Camp Hill, Digbeth, will see 480 new homes.
Long Harbour and its Canadian backers are looking in the other direction, having agreed a £650M injection to support a new BTR partnership.
“Our priority for new sites will be London and the South East, where we have a strong pipeline of potential assets in addition to our existing projects,” Long Harbour Chief Executive William Astor said.
Canada’s Public Sector Pension Investment Board, via PSP Investments, and the Ontario Teachers’ Pension Plan’s real estate arm, Cadillac Fairview, are backing the JV that will fold into Way of Life, Long Harbour’s existing residential management business.
Long Harbour’s publicists declined to comment on the involvement in the platform of CK Hutchinson Holdings, amidst React News reports that it has exited the venture. The Hong Kong-listed business associated with Li Ka-Shing bought a minority holding in Long Harbour in 2012.
Long Harbour said the new venture will “combine investment, development, and operations capability within a single market-leading new platform”.
The deal builds on an existing £500M partnership with PSP, established in 2019 and called Long Harbour Multi Family. The initial capital from that venture is now almost fully committed. Projects include 480 rental units at Tottenham, North London, a £226M forward funding across two phases due to complete in 2023.
Way of Life has more than 2,800 units in operation and under development.
Macquarie’s Goodstone Living venture is reported to be planning to raise £1B in debt and equity to support schemes in Birmingham, Manchester and the capital.
The new business will be led by Martin Bellinger and Daryl Flay, BTR veterans, and partners in Essential Land.
The Birmingham buy, the details of which have not been disclosed, provides Goodstone with a prominent site in Birmingham’s BTR hot spot. The scheme had a long and complex planning history, and it was only approved after the intervention of Secretary of State for Housing, Communities and Local Government Robert Jenrick.
