Can Luis Suarez deliver where government, institutions and various think tanks have failed and propel the private rented sector to the top of the investor league? Almost certainly, if his bold play this week is anything to go by.
The long-mooted expansion of PRS has had a stuttering start but is at last delivering results. Delancey has offered 1,439 homes to the private rented sector at East Village in the Olympic Park, E20, with more in the pipeline. Various other investors and developers are delivering too – from UK Regeneration in Derby and Nottingham to M&G through its deal with Berkeley Homes. Legal & General and others are poised.
Meanwhile, the government insists its £1bn build-to-rent fund is helping ensure work is under way by 2015 on 10,000 new homes specifically for private rent.
And PRS was the talk of the London stand at MIPIM last week too, where Residential Land’s Bruce Ritchie was flexing his rental muscles.
Yet despite all that commendable activity, it is only very recently that talk has become widespread action. And it still feels that these initiatives are exercising this industry more than making a difference to the UK’s chronic housing shortage.
It may sound flippant, but Suarez will help change that. He is one of five Premier League football stars to partner with Manchester-based Capital & Centric Investments and support a £250m property development company focusing on PRS schemes (p31).
Joining Suarez as a director in the new venture are Capital & Centric founders Tim Heatley and Adam Higgins, fellow ?Liverpool players José Enrique and Lucas Leiva, and Arsenal midfield duo Santi Cazorla and Mikel Arteta. Between them they have invested £50m to buy and speculatively develop sites for private rented homes. They hope to build a £250m portfolio.
The footballers’ motives are understandable. Like all of their peers, they have the capacity to earn fabulous sums of money over a short career. That they should choose to invest a sizeable proportion of their wealth in the PRS is significant and will promote the sector as an investment vehicle, and perhaps the legitimacy of the rental market itself too.
Their choice shows how far footballers have come since the days when an “investment” consisted of a pub and a race horse. In truth, it is only in the past 20 years or so that they have moved from being wealthy to being rich, so property was always an inevitable play.
The deal also shows how widely the changing demographic of the UK is recognised. As one propco chief executive said to me this week, within a decade renting will no longer be seen as a secondary tenure to home ownership. This deal lends further support to that view.
And if the likes of Suarez, Enrique and Arteta are piling into PRS, who’s next? Capital & Centric has been talking to others from the worlds of football, motor sports and tennis. Other high-net-worth individuals will surely follow.
Suarez et al are also set to challenge the notion that PRS activity is too heavily focused on London and the South East. Capital & Centric will focus on the North West, with Manchester a likely starting point.
Next month, the Urban Land Institute will garner fewer column inches than Liverpool and Arsenal players when it publishes a Best Practice Guide on Build to Rent. The tome is jointly sponsored by the government’s PRS taskforce and will do much to further an expanded, scalable and high-quality PRS market. The ULI hopes it will become as indispensable a tool to the residential sector as the BCO Specification Guide is to the office sector.
It has been a good week for the PRS, and there’s plenty more to come before the season’s over.
Damian.Wild@estatesgazette.com
