Dutch asset manager APG and UK property company Grainger are investing in a London build-to-rent scheme.

The pair’s GRIP Unit Trust joint venture will forward purchase a 90,000sqft build-to-rent, private rented sector (PRS) scheme from Bouygues Development for £33.25m (€44.5m).

APG entered the UK residential property market in 2013, buying part of a £350m portfolio with Grainger.

The Dutch institution invested £158m in GRIP to buy part of G:res1, one of Grainger’s property funds. 

GRIP is focused on London and the southeast of the UK.

The deal is Grainger’s third with Bouygues.

Tracey Hartley, GRIP fund manager, said demand for high-quality rented homes “far outweighs supply”.

“PRS represents a long-term rental income and a stable yield for our investors,” Hartley said. 

“In line with our strategy, and with the financial support of Grainger and APG, GRIP will continue to explore further investment opportunities including build-to-rent.”

The 16-storey residential tower will provide 134 one and two-bedroom apartments.

The joint venture said a PRS covenant had been applied, with permitted use restricted for the first eight years to PRS accommodation.

Bouygues Development, which is also developer, has taken a stake in the asset, part of the Hallsville Quarter project in Canning Town to the east of the UK capital.