GLC PGGM 2

Legal & General Capital (LGC) and Dutch pension fund manager, PGGM, have announced the launch of a Build to Rent partnership. The partnership will initially invest £600m into building purpose built private rental housing across the UK, providing over 3000 homes.

The LGC and PGGM partnership aims to help address the UK housing crisis by increasing the supply of new homes. The UK does not achieve its minimum house building target – building only around 50% of its 250,000 annual requirement, forcing a higher proportion of its population into sub-standard rental accommodation.

In America and Europe, fully fledged institutionally funded and managed rental property markets have developed to increase the supply of homes, lower prices and provide better quality products and service. In the UK the rental market is different, due to the lack of supply of quality homes, and its cottage industry nature. LGC plans to disrupt the status quo of ever increasing rental rises by investing long-term institutional funds into building new homes to rent at scale, and by developing a UK institutional rental market.

Paul Stanworth, Managing Director of Legal & General Capital, said: “The UK rental market, compared to the US and Europe, is dysfunctional, with ever increasing rents and increasingly poor accommodation. For this to change, and renting to become more affordable, we need to invest in the ‘new’, and build new homes to rent, and just stop inflating the prices of old housing stock. At Legal & General we’re going to play our part by disrupting the market, and invest significant sums of long-term institutional money to build new rental housing, and develop a UK institutional rental market.”

The partnership signals a different approach in addressing the UK Housing crisis – long term capital will now be building and owning assets in scale, for the long term. The developments will be purpose built, and of high standard to suit institutional investment. The sites will help urban regeneration, and incorporate modern green design and infrastructure. The partnership has been seeded with three Build to Rent development schemes; Bristol (photo above), Salford (photo right) and Walthamstow, forecast to deliver over 650 homes. It is also in detailed discussions on the acquisition of numerous sites, all situated in well-connected urban locations where there is strong demand.

Source : http://www.legalandgeneralgroup.com/

GLC PGGM

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