Berkeley Plans To Bring In Outside Investors For Initial £1.2B BTR Business

One of the UK’s biggest housebuilders is offering more detail about its strategy to move into the build-to-rent sector. 

Berkeley Group is looking to bring third-party investors into the BTR platform it is creating, it said in half-year results to 31 October. 

Berekely said it had identified 16 sites in London and the south-east of England with the potential for 4,000 BTR homes, an average of 250 per site. Building these homes would cost about £1.2B.

The housebuilder could bring in third-party funding to pay for the construction of that portfolio or to expand the initial portfolio. It could also generate new money by creating a fund or finding individual joint venture partners. 

Housebuilders have been selling portfolios of homes on an ad hoc basis to BTR investors over the past two years as they have sought bulk exits amid sluggish home sales hitting profits. But Berkeley said that building a BTR business would allow it to maximise profits and use its capital flexibly. 

Building a £1.2B, 4,000-home portfolio would make it one of the largest BTR developers in the UK. 

The company said the BTR sector would need to grow if the government is to hit housebuilding targets because it is getting harder for people to buy homes built for sale. 

“In the current operating environment, characterised by ongoing cost and affordability pressures, coupled with strong and increasing occupational and institutional demand, Berkeley believes that BTR will be central to the Government meeting its ambition for new homes during this Parliament,” the company said.