Swedish private equity firm EQT Real Estate has agreed a joint venture with Sigma Capital to develop a £1bn build-to-rent portfolio in Greater London.
EQT will invest £300m alongside £16m from Sigma. With gearing the partners aim to deliver 3,000 homes in affordable areas in outer boroughs.
It is EQT’s first investment in the UK, as part of a focus on beds in sheds in European gateway cities.
The new partnership follows Sigma’s expansion into London less than a year ago with the acquisition of two schemes at Barking (Beam Park, pictured) and Havering from its strategic partner Countryside. The jv has agreed to purchase the two sites comprising 157 flats from Sigma on completion.
Backed by a £50m loan from Homes England, it has already secured 361 homes from Countryside across five sites in Ealing, Enfield and Havering.
The commitment from Homes England follows consistent support for Sigma, with the agency having backed every initiative to date. Similarly the partnership with Countryside replicates Sigma’s strategy in the regions, where it has 4,200 operational homes.
Sigma and EQT are also evaluating a pipeline of future schemes to grow the London portfolio, and expects to deliver the homes over the next five years.
Rob Rackind, partner at EQT Partners and head of EQT Real Estate, said: “I cannot think of a more compelling investment opportunity at the moment than to deploy capital into this high conviction strategy, and one that should deliver significant social impact, by providing market-rate housing to renters in affordable locations within Greater London and its commuter towns with strong transport links.”
Peter Shacalis, director at EQT Partners and head of UK, EQT Real Estate, said: “In addition to the initial seven schemes, we are currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional BTR portfolio with robust and diversified rental income.”
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