Retirement living developer McCarthy & Stone has instructed Rothschild to secure finance to help it build a £300m rental portfolio.
In a trading update it said it has already received expressions of interest and will provide a further update in its full year results.
McCarthy & Stone holds a seed portfolio of more than 100 homes on its balance sheet, which it will sell to the strategic partner.
It said the homes generate gross yields of 6-8%.
The developer reported net reservation rates of seven per week across 70 developments. It has agreed 101 rentals, 21 rent-to-buy and 47 shared ownership transactions.
The company said it now expects an increased proportion of its 2,100 targeted volumes next year to come from its new rental offering. It will also start its first development using modern methods of construction next year.
John Tonkiss, chief executive officer, highlighted the progress of the rental strategy. He said “initial pilots have confirmed strong demand for renting in later life” making the business “more resilient”.
Tonkiss said: “We are committed to finding a high quality strategic capital partner to co-invest with us in this hugely underserved retirement rental space, in order to develop our vision of creating even deeper and longer lasting relationships with our customers.”
McCarthy & Stone projected full year revenue of £720m, up 7% from the previous year. It completed 2,301 homes with an average selling price of £308k and forecasted operating profit in the range of £64-71m, against £67.5m last year.
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