M&G Real Estate’s UK residential property fund has agreed a £82.7m (€93.5m) deal to buy 186 new homes in London from Redrow Homes for £82.7m.

The deal will fund the delivery of one, two and three-bedroom build-to-rent (BTR) homes at Redrow’s Colindale Gardens development in Colindale. Completion of the BTR units is expected by 2021.

Colindale Gardens is a £1.2bn new community, which is being created by Redrow on the site of the former Peel Centre Metropolitan Police training college, which will see more than 2,900 new homes built over the next ten years.

The deal marks M&G UK Residential Property Fund’s third BTR transaction this year. M&G’s total residential units now stand at around 2,500

Alex Greaves, the head of residential investment at M&G Real Estate, said: “This new deal with another top UK house-builder, increases our ongoing development pipeline, offering our investors the opportunity to continue capitalising on the UK’s rapidly growing private rental market. We look forward to continued deals of this stature in the sector, providing investors with the chance to increase their exposure to the residential market.

“This development is a clear statement that renting can be the tenure of choice for an upwardly mobile workforce, which requires the flexibility of renting with high-quality service and support. Colindale has emerged as a property hotspot and is an area undergoing major transformation.”

Mark Parker, a managing director at Redrow Homes East London, said: “This deal is another exciting step forward for Colindale Gardens and Redrow as we look to create a diverse and sustainable community that offers a range of housing for a diverse mix of Londoners.

“The wider area is fast becoming a hotspot for families and young professionals and our development will offer all the attributes which customers prioritise, including excellent connectivity, green open spaces and an abundance of amenities on their doorstep.”

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