MGT Investment Management is planning to invest equity of £100m in rental accommodation across the South East.
The investor will target schemes suited to an older age bracket, which it argues are “totally unprovided for” by the current build-to-rent model.
The investment manager, which is backed by institutional and family office capital from the US and Europe, aims to bring forward a circa 1,000-unit portfolio across five to 10 projects.
MGT is targeting areas with strong technology clusters combined with a highly skilled demographic, including tech workers renting later in life. It will focus on areas surrounding commercial centres in the South, including Reading, Guildford, Bristol, Cambridge, Milton Keynes, Oxford and Southampton.
It will look at acquiring medium-sized schemes of between 150 and 300 units from housebuilders, developers and landowners in suburban locations.
Henry Morris, managing director and founding member of MGT, said: “I think this is totally unprovided for in the BTR space. Instead of just small apartments, we will look to include maisonettes and townhouses with green surrounding areas.
“A lot of people are renting well into their 30s and 40s. Most of the BTR stock today has focused on urban product in the South East, high-rise apartments close to transport.”
MGT was created by co-founder of Europa Capital Charles Graham in 2017 alongside his former Europa colleagues Morris and Callum Thorneycroft. Last June MGT formed a joint venture with US property developer Lincoln Property Company to develop large-scale PRS and mixed-use developments, starting with the £750m Station Hill scheme in Reading.
Other firms to follow a similar tactic include PRS REIT, which acquired four North West residential sites outside Birmingham, Liverpool and Manchester for £68m in November. The firm has plans to deliver 464 new family rental homes for a gross development cost of £68.2m.
Morris acknowledged this is an “initial example” of how PRS specialists can target the wider suburbs around tech-focused cities and towns, but that MGT’s venture is “more of a management proposition”.
He added: “We have held interviews with tenants who are not very satisfied with management. We are aiming to provide more centralised management on site so someone can deal with a boiler breaking down quickly.”
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