McCarthy Stone has signed a deal with John Laing Group and Macquarie Capital securing £200m in backing for its build-to-rent drive.
The investors have formed a 50:50 joint venture vehicle called Brigid Investments to fund a portfolio of rental housing.
It has agreed an initial commitment of £80m, with 250 homes to be acquired on completion of the deal, with a further £120m to acquire 400 homes over the next 12 months.
Brigid Investments has appointed McCarthy Stone’s Richard Williams as chief executive. Williams was previously regional managing director at the developer, with former roles including a position at Aldi and 20 years in real estate.
See also: The EG Interview: John Tonkiss on finding McCarthy Stone’s third way
John Laing has a history of investment in specialist accommodation and social infrastructure and Australia-headquartered Macquarie is the world’s largest infrastructure investor. Earlier this year, Macquarie launched a hunt for finance for its BTR debut in a tie-up with the founders of developer Esssential Living.
McCarthy Stone launched a search for a funder at the end of 2019, but was forced to put the plans on ice when the pandemic hit. The retirement developer has been implementing a strategy to transform the business to include rental and affordable tenures. This year it was acquired by private equity giant Lone Star in a near £650m deal.
Ben Loomes, chief executive of John Laing Group, said: “Retirement living is a market with high barriers to entry and strong fundamentals, underpinned by an ageing population and constrained supply.
“This investment is in line with our strategy of investing in platforms which are asset-backed, scalable and offer long-term, resilient cash flows. Importantly, this investment brings inflation-linked revenues and strong cash yield from the outset. There is potential for significant value creation both through scaling the platform, and as the sector matures and attracts further institutional capital into core infrastructure assets.”
John Tonkiss, chief executive at McCarthy Stone, said: ““Partnering with experienced and dependable infrastructure investors such as John Laing and Macquarie creates the platform to fund greater expansion of our rental offering and provides the business with a highly sustainable platform for growth. It also proves for the first time the retirement living rental proposition in the UK market.”
Rothschild & Co advised McCarthy Stone.
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