Three sites formerly owned by co-living developer The Collective are set to be listed as a new real estate investment trust in a float that could raise £300m.
Gravis Capital Management expects to list GCP Co-Living REIT following the publication of a prospectus later this month, making it the first co-living-focused investment vehicle on the London market.
Its £425m seed portfolio will include three sites formerly owned by The Collective, which entered administration last year – two landmark operational schemes at Old Oak and Canary Wharf (pictured) and a scheme under development at Westbourne Park, W9.
Gravis has also identified a further pipeline of deals it expects to be valued at more than £1bn.
After The Collective entered administration, secured creditors set up a funding vehicle to acquire six of its assets, including Old Oak and Canary Wharf, three other development sites in London and one operational scheme in New York.
The REIT expects to target a dividend yield of 5% once the development scheme is complete, and a total NAV return of 8% over the medium term.
The REIT’s board of directors will be chaired by Malcolm Naish, non-executive chairman of Target Healthcare REIT. The investment team is led by Nick Barker, and advised GCP Student Living, which has been sold to Scape Living and iQ.
Gravis, which has some £3bn of private, institutional and public capital under management, will invest £3m in the IPO and will also reinvest 10% of its annual investment management fee.
Barker said: “The co-living sub-sector of the residential market is attracting significant interest from real estate investors and specialists, as well as local government and planning agencies which see the potential of this housing model to address fundamental inequalities in the residential sector.
“We are seeing a generation which has enjoyed the benefits of PBSA now seeking those same benefits as they progress in their professional lives. With a focus on mental health and wellbeing derived from the shared living experience, as well the environmental benefits of purpose-built assets which meet high sustainability standards, we believe co-living has exciting prospects for the future.”
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