Residential property investment platform Bricklane has announced that it’s completed the acquisition of a portfolio of residential assets worth more than £13.6 million from the British Residential Unit Trust (BRUT).
The transaction was made up of a cash and shares consideration and more than doubles the size of the existing portfolio.
The BRUT portfolio encompasses 74 private rental sector units, which are 93% leased, spread across four ‘high-quality buildings’ situated in Manchester and Birmingham – two of the UK’s most popular cities for renters.
Acquired on behalf of Bricklane’s Regional Capitals REIT (otherwise known as ‘the Fund’), the buildings in question grow its total number of properties to 127 and take its AUM (assets under management) to £23.6 million.
Bricklane says the new units are ‘a strong strategic fit’ with the existing portfolio and provide additional exposure to specific attractive submarkets already targeted by the Fund, for example Birmingham’s thriving, historic Jewellery Quarter.
The investment platform says its ‘Regional Capitals REIT’ has experienced a total return of 20%+ since launching in September 2016, despite political uncertainty caused by Brexit and two general elections.
It adds that it is now well-poised to benefit from increased market momentum, brought about by the Conservatives’ decisive election win, greater clarity over Brexit and the much-talked about ‘Boris bounce’.
For BRUT shareholders, Bricklane says the ‘part-share part-cash consideration’ allows them to maintain exposure to the strongly performing assets while removing direct management responsibilities and operating overheads.
“We are actively looking to buy portfolios that fit our strategic criteria and can help us to increase our scale, ultimately benefiting our investors and tenants alike,” Simon Heawood, chief executive and co-founder of Bricklane, said.
“Changes to taxation and legislation are making it less worthwhile for individual investors to manage buy-to-let properties themselves. Bricklane is well-positioned to be flexible on the structure of our transactions, including fast-moving cash purchases, and this acquisition from BRUT on a part-cash part-shares basis, enabling landlords to relinquish the responsibility of day-to-day property management while maintaining exposure to residential property.”
The purchase of the BRUT portfolio follows the close of Bricklane’s £4.7 million Series A funding round, led by venture capital firm A/O Proptech and DMG Ventures, and comes not long after the appointment of Oren Peleg as Chairman, a man who has enjoyed a long career in real estate, private equity and scale-up businesses.
Both the appointment and funding coincided with the extension of Bricklane’s real estate investment solutions, moving beyond retail audiences to institutional investors and wealth managers.
Since being founded in 2016, Bricklane has made it its mission to allow investors to invest flexibly in UK residential property, held in geographically focused REITs through ISA and SIPP wrappers.
The company says that investing through the platform ‘offers a hassle-free, tax efficient alternative to direct buy-to-let ownership’, with returns generated from both rental income and capital growth.