PGIM Real Estate has made the first acquisition from its £190m affordable housing fund.
The investor has secured a portfolio of eight sites comprising 433 homes in the Midlands and north of England from developer Wise Living.
PGIM Real Estate has purchased five stabilised assets and three development sites spanning 314,000 sq ft. The schemes are made up of two- and three-bedroom houses in areas close to local employers, a school and supermarkets.
Wise Living will manage the properties and the partners will work together to source new opportunities.
Projects will be backed by the UK Affordable Housing Fund, which focuses on single-family housing at affordable rents. PGIM Real Estate unveiled the fund earlier this year, backed by the Northern LGPS and Brunel Pension Partnership, with debt providing £250m to deploy.
The fund is the first of its kind for PGIM Real Estate, which has to date focused on partnerships and closed mandates. Since 2016 it has grown portfolios in Hull, Reading, Southampton, Dunbar, Glasgow and South Yorkshire. It is managed by PGIM Real Estate’s head of UK transactions, Charles Crowe, and senior portfolio manager, Paul Dennis-Jones.
Crowe said: “Our recently launched strategy aims to alleviate the major supply-demand imbalance within UK affordable housing, benefiting working people and families, as well as income-focused investors.
“Despite recent economic uncertainty as a result of Covid-19, suburban areas and smaller towns with a greater emphasis on housing over apartments are reporting much stronger rental growth than city centre markets.”
Andy Deller, chief executive officer of Wise Living, said: “This is a significant transaction and marks the beginning of our new collaboration with PGIM Real Estate. We will be working together to secure further sites for it to invest in over the coming months and years.”
PGIM Real Estate is also a member of the newly launched British Property Federation’s Affordable Housing Committee. The 17-strong group aims to increase private investment in affordable housing and lead the sector’s engagement with the public sector.
CBRE advised PGIM Real Estate.
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