A portfolio of 192 social rented homes in Ealing, west London, is being sold by a charity for £37.4m.
The properties are held on a long leasehold of 164 years and are set with a number residential blocks in the borough, clustered around Northolt, Southall and Greenford.
The guide price reflects a 4.25% net initial yield with a gross rental income of £2.14m per annum. The next rent review is in April 2021. The portfolio is expected to produce net rental income of £1.67m this year.
The homes are let on individual leases to social housing provider Plexus UK and guaranteed by Mears Group for an unexpired term of more than 15 years and further secured by a nominations agreement with Ealing Council for a remaining 55 years.
The council owns the freehold to 113 of the buildings, the remaining 79 are held by private landlords or housing associations. Gerald Eve is advising the vendor.
Richard Lines, partner at Gerald Eve, said: “Project Oak represents an exciting and rare opportunity to secure exposure to an asset class that is seeing increased demand as investors target both the residential and socially responsible real estate markets.”
Project Oak comes to market as investor appetite for defensive affordable homes continues to rise.
This month M&G Real Estate inked a £500m partnership to buy shared ownership homes with Hyde Housing, with PGIM Real Estate also expanding its affordable housing and developers increasingly seeking RP status to hold assets for investors.
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