EcoWorld London and Invesco Real Estate have agreed a new £400m joint venture which will see more than 1,000 new homes in the capital forward funded.
Invesco is to back the Malaysian developer to build out two sites in Brentford, west London, and Barking, east London, with the deal set to complete by the end of October.
The deal follows on from EcoWorld’s acquisition of the sites through its 70% purchase of Wilmott Dixon’s residential business Be Living in November last year.
The west London site is located next to the Brentford Football Club’s new 17,250-capacity stadium that is currently under construction and near Kew Gardens. The east London site is located next to the Barking Abbey.
Develop and manage
EcoWorld will develop the projects and retain the management of the assets. Development has already begun on both projects with completion due not before 2020.
Invesco has been one of the most prolific investors in the UK PRS sector having launched a £250m fund in 2016. Under the stewardship of senior director John German it has since undertaken a number of individual site transactions as well as portfolio deals and joint ventures to bolster its portfolio, including a 10-year partnership with developer Platform.
According to CBRE, annual PRS investment in the UK currently stands at only £2.4bn per year but this is predicted to quadruple within five years to £10bn and the desire for major global institutions to pile into the growing sector has been underlined by increasingly large deals such as the £2.3bn sale of Lone Star’s Quintain, which a Delancey-led consortium that includes Oxford Properties, Qatari Diar and APG is vying to acquire.
‘Great potential’
Tan Sri Dato’ Sri Liew Kee Sin, executive vice chairman of EcoWorld International, said: “EcoWorld London sees great potential in the UK build-to-rent market and this deal validates our move to make the fast-emerging sector one of the key growth drivers for EcoWorld London.
“As a business we are perfectly placed to develop and manage these schemes to the high quality that investors and residents expect from us and through EcoWorld London we have best-in-class build-to-rent capabilities. This significant investment by a US-based global pension fund in two of our projects is testament to that.
“In the future we will seek to do more deals of this kind and we have already received expressions of interest from other funds, particularly from Asia, keen to pursue potential investments into the UK build to rent sector.”
John German, Senior Director – Residential Investments, Invesco Real Estate, comments:
“The two investments at Kew and Barking provide an opportunity to create a “best in class” purpose built residential product (Build to Rent), which is suited to today’s expanding rental market in London. They are key to our growing UK residential investment programme, which is now approaching £1bn.
As we continue to see the average person being priced out of the owner occupation, with EcoWorld London we have developed a product which is tailored to the local rental markets of Kew and Barking where we see strong tenant demand for BtR and a limited availability of rental units.
“The Invesco Team is delighted to secure this c.£400m UK BtR investment for our long-standing US separate account client, who recently concluded the purchase of a mixed use scheme in Paddington.”
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