UK residential rented market opened up to institutional investors by INTERNOS and C4H
05 February 2015
INTERNOS Global Investors (“INTERNOS”) has formed a partnership with Catalyst for Homes (“C4H”), a community interest group, to explore the creation of a number of direct and indirect investment vehicles that will allow institutions to invest in scale in the UK residential rented market.
152 residential development sites across Greater London are being evaluated by INTERNOS and C4H with a view to selecting the most attractive for the institutional market. Suitable sites are expected to provide an array of characteristics including asset management potential and up to 30-year income returns. This will be attractive to investors allocating from real estate, infrastructure and fixed income quotas.
“The UK private rented sector is worth around £837 billion, of which only £18 billion (2%) is currently in the hands of institutional investors – the vast majority being held by private amateur landlords,” Andrew Taylor, UK Residential Investment at INTERNOS Global Investors, commented.
“This compares to the UK commercial property market where more than 56% of the £647 billion estimated value is owned and professionally managed by institutions.”
“This disparity offers a significant chance to grow institutional investment with professional management in this previously overlooked market,” Taylor added. This, when coupled with the worrying outlook for global equity and fixed income returns, makes the UK residential market an attractive proposition for risk-averse/return hungry investors.
CH4, which was founded in 2010 by Clive Bird, is currently chaired by Adam Sampson, former CEO of housing charity Shelter. Their main aim is to channel large scale institutional investment to create sustainable mixed tenure communities.
“The returns from residential investment over the past decade have significantly outperformed comparable markets,” Adam Sampson said. “The alliance with INTERNOS provides an opportunity for increased access to this market for investors at the same time as addressing the desperate shortage of affordable housing which affects both individuals