Legal & General (L&G) has formed a new partnership with Japanese developer Nomura Real Estate Development to deliver more than 1,000 build-to-rent (BTR) homes in the UK.
While finanicial details were not disclosed, IPE Real Assets understands that the majority of the funding for the joint venture will come from Nomura Real Estate, with the remainder from L&G.
The partnership has been launched with the acquisition of a site in Herne Hill, in South-East London, for the development of 200 rental homes.
With 35% of the homes designated as affordable housing, the project aims to foster a “diverse and accessible community while blending modern architecture with community-focused design to create an exceptional living environment”, the partners said.
The partnership will initially target sites in central London, focusing on brownfield and underutilised land to help regenerate communities and maximise the delivery of sustainable, high-quality homes.
Over the next five years, the joint venture said it is aiming to deliver an initial 1,000 homes across a range of sites. All properties will be developed and operated by L&G.
Bill Hughes, global head of private markets, L&G, said: “This announcement further exemplifies our growth ambitions coming to fruition. Our residential platform is one of the longest standing foundations of our private markets capabilities and will continue to be a strategic driver of growth.
“Through long-term global partnerships, such as this, we continue to deepen our international presence, and deliver on our strategy to attract third-party capital to co-invest in our private assets.”
“This partnership demonstrates how L&G’s expertise and track-record in UK real estate attracts international investment into the UK’s residential market, supporting the UK government’s initiative to boost housing delivery and accelerate growth.”
Dan Batterton, head of residential, L&G, added that the joint venture with Nomura “demonstrates the attractiveness of the UK residential market” for international investors.
Batterton said: “This partnership is a great example of how we can bring international capital into the UK to drive up delivery of much-needed homes, across all tenures.
“Institutional investment has an important role to play, and we expect investor demand in UK housing to continue to grow as the government continues to look to meet its housing targets.”
Since launching its BTR strategy in 2016, L&G has deployed over £3bn (€3.6bn) of capital into the BTR sector, delivering more than 10,000 rental homes.
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