CBRE Global Investors buys residential portfolio for UK pension fund

CBRE Global Investors has bought a UK residential portfolio for a local authority pension fund.

The investment manager said the £8.9m (€12.48m) deal was the first it has completed in the social housing sector.

Ian Wilson, director and fund manager, said the company saw “huge” potential in the sector.

“The RPI-linked leases provide long-term, index-beating income returns from a diverse occupier base,” Wilson said.

“It offers our client attractive real returns, whatever the future inflationary environment.”

Shared ownership housing, the firm said, mitigates risks associated with residential investment, with each shared ownership tenant having his own equity in the property, making him a long-term tenant.

“These factors mitigate a number of the active management issues that usually arise from institutional residential property ownership,” Wilson said.

With the UK weeks away from a general election, the country’s main political parties have been offering contrasting plans for the residential sector.

Under those laid out in the Conservative Party’s manifesto, housing association tenants would be given the right to buy their properties at a discount rate.

The move could affect as many as 1.3m tenants.

The 218 properties bought by CBRE GI were sold by Derby-based housing provider Derwent Living, which will continue to manage the portfolio.

The portfolio of 137 houses, 78 flats and three bungalows, built between 1990 and 2010, is spread across the East Midlands.