Grainger has agreed to forward fund a 307-home build-to-rent development at Capital Quarter in Cardiff for £57m.
The acquisition from IM Properties is the rental giant’s first move in Wales.
Capital Quarter is a 10-acre site with plans for more than 1m sq ft of mixed-use development.
Grainger expects completion in 2022 and a gross yield on cost of 7% once the asset is stabilised.
Iain McArthur, director of residential capital markets at IM Properties, said: “This scheme will set a new benchmark for residential rental property in Cardiff and is the first of a number of high-quality PRS sites our in-house project team is delivering, working alongside our residential and strategic land operations to maximise our existing £1bn portfolio.”
Grainger pointed to strong rental fundamentals in Cardiff, where major employers include the BBC, HMRC and PwC.
The city has traditionally had a lack of purpose-built rental stock, attracting a number of BTR providers, including Platform_ with 206 flats on Dumballs Road and Legal & General, which is building a 318-home scheme at Central Square.
Grainger has an operational portfolio of 5,597 homes and a pipeline of 9,104 homes. It has a goal to deliver 1,000 operational units next year.
Knight Frank advised IM Properties.
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