Catella APAM has secured the first build-to-rent investment in the UK on behalf of a €1bn European fund.
The Catella European Residential Fund III has acquired The Arches in Leicester from Watkin Jones in a forward commitment for £31.65m (€37m).
The riverside development comprises 184-flats and amenities including a communal garden, co-working space, a cinema room, gym and two lounges. It is located on Bath Lane, on the River Soar in the wider Leicester Waterside regeneration area.
The transaction was the first acquisition from Catella APM acting as investment and asset manager for the CER Fund III.
The open-ended fund has a target volume of €1bn (£860m) and invests in core and core-plus assets across Europe, in Germany, the Netherlands, France and Scandinavia.
It is designed such that at least half of the investment is focused on BTR, with the remaining funds on student, senior living and serviced apartments. The fund was launched in March 2019.
Patrick Au Yeung, fund manager for the CER Fund III, said: “With Catella APAM we have been able to secure our first UK acquisition for the CER III Fund as part of a longer-term strategy to invest in high-quality, well-located, residential assets across the UK.
“This acquisition in Leicester in the UK marks the seventh country for CER III in less than two years. The fund has a strong pipeline with compelling investment opportunities to act upon in the forthcoming months in order to further grow and diversify the portfolio.”
Alex Pease, chief investment officer at Watkin Jones, said: “The UK’s market for rental homes remains very strong, with a growing population of renters seeking a better rental experience and lifestyle. We also see very strong international and domestic demand from institutional investors who are looking for high-quality assets that will deliver long-term returns.”
Gerald Eve advised Catella and Cushman & Wakefield advised Watkin Jones.
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