PGIM Real Estate and Osborne Developments have agreed a joint venture to invest £250m into build-to-rent development.
The new vehicle will source, develop and operate schemes across the south of England.
PGIM Real Estate will back the partnership with equity from its $1.1bn (£830m) fund European Value Partners II, which closed last quarter.
The deal follows an initial tie-up in May, with PGIM Real Estate agreeing to forward fund Osborne’s 135-flat BTR scheme in Brighton (pictured) on behalf of investors in its European core strategy.
The new jv will build on this, but through a cost-efficient end-to-end model, utilising Osborne’s construction capabilities and providing derisked housing development at scale. The company will acquire land to build, stabilise and operate schemes.
Osborne Developments is a privately owned developer, contractor, off-site manufacturer and property maintenance business and part of the wider Osborne Group. The company has delivered 3,500 student beds, and 1,250 for its own development business and other landowners, including Westminster City Council and Islington Council.
Osborne recently sold its infrastructure business and is now doubling down on build-to-rent development.
David Walters, director of development at Osborne Developments, said: “This venture with PGIM Real Estate allows us to focus on the current pipeline and secure new BTR opportunities.
“This is a fundamental part of our development business, and is complemented by our other activities, including student accommodation and single-family housing utilising our off-site manufacturing business.”
The deal follows a surge in residential investment from PGIM Real Estate, which has seen the fund manager’s portfolio rise to over 1,000 homes in just over a year. PGIM Real Estate made its first BTR acquisition last October, with the £31.5m purchase of Inland Homes’ 123-flat High Wycombe scheme. It has since launched a £190m affordable housing fund and agreed a portfolio of schemes in the Midlands and north of England with developer Wise Living.
Charles Crowe, head of UK transactions at PGIM Real Estate, added: “Mobility is valued more than ever, and the most recent generation is renting much more than in the past, driving the need for the development of modern, first-rate affordable living spaces.
“This venture will see significant capital being deployed to build and develop these high-quality homes in areas with supply shortage, whilst creating value for our investors.”
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