Build to Rent operator Atlas Residential has revealed that it will deploy $1 billion (£900 million) through its affiliate Atlas Residential Holdings (Hong Kong) Limited to establish a first ever global multifamily apartment portfolio via its discretionary private opportunity fund.
The targeted portfolio will be made up of several thousand existing Atlas units and newly acquired value-add and development properties throughout the US, UK and mainland China.
The portfolio will be allocated as follows: 65% US, 20% China and 15% UK, targeting value-add acquisitions or developments primarily in areas with large populations and strong employment levels.
“We want to blend the stability and continued growth of US multi-family assets with what we are seeing as coming sector distress in the UK with Brexit and in China with US trade war effects and government policy forcing developers to shift to rental development,” Steven Ivankovich, Atlas chief executive, commented.
In China, Atlas is working closely with developers who are struggling to sell units and are being forced to build properties exclusively for rent thanks to the recent change in government policy towards housing.
“We are seeing significant distress and a 'deer in headlight' effect as builders and developers just don’t know what to do when it comes to rental apartments,” Patrick Kelly, Shanghai-based managing director of Atlas China, said. “I have been living and working in the Chinese property sector for 20 years and see huge opportunity and a long-term competitive advantage for Atlas here.”
In the UK, meanwhile, recently appointed Atlas UK Managing Director, Kelvin Sutherland, is focusing on projects in the Middlesex, Sussex, Kent, and Lancashire markets for the portfolio, as well as looking to acquire existing properties.
“From what we are seeing in the market, inexperienced UK multi-family (Build to Rent) operators will need to dispose of underperforming assets as they struggle to cope with market tightening and in some cases sub-market oversupply,” Sutherland said.
Georgie Harper-Wilde, Atlas’ UK regional director, added: “The training and support we receive from our US counterparts who are multi-family experts - is second to none and far exceeds anything else I have seen in Build to Rent in the UK. This translates at the property level where we have achieved unprecedented performance which we are extremely proud of.”
In the UK, Atlas Residential currently has three sites operating and/or under construction - totalling approximately 1,000 units, with a further 1,500 units in the pipeline.
This includes Bow Square in Southampton, a 279-home development which first opened in September 2017, and a 238-home development in Salford’s MediaCityUK, which is set to open in November 2019.