LaSalle Investment buys first properties for UK PRS fund

LaSalle Investment Management has bought its first assets for its UK Private Residential Fund.

The properties – in Leeds and London – include 270 purpose-built residential units and were bought for £25m (€33.4m) and £30m, respectively.

The investment manager last month said it raised £120m for its first UK private-rented sector (PRS) property fund. 

It is aiming to invest more than £500m in the residential market for clients through the fund and other investment vehicles.

Andrew Stanford, UK residential fund manager at LaSalle Investment Management, said: “The fund’s first investments illustrate our commitment to acquiring high-quality build-to-rent assets in markets where we anticipate strong demand.”

It acquired Waterside Apartments in Leeds from CVI Leeds Waterside for £25m in an off-market transaction at a 6.7% gross initial yield.

“Waterside Apartments is a rare, large-scale, income-producing asset with ample opportunity to add value through proactive asset management,” Stanford said.

The third phase of London’s Rathbone Market redevelopment was bought from English Cities Fund through a forward commitment of £30m at a 5.2% gross initial yield.

The asset, near east London’s Canning Town station, is the final stage of Muse Development’s Rathbone Market regeneration project and is due for completion at the end of this year.

“By committing to purchase build-to-rent units in Canning Town,” Stanford said, ”we have bought into a large-scale regeneration project that will see this well-connected area of London transformed physically and economically, making it a highly desirable place to live.”

Speaking at a PRS event in London organised by LaSalle last month, Stanford said the company had a “visible pipeline of build-to-rent schemes”.

The company last year hired Savills as property manager for its UK portfolio.

While few deals have completed, Stanford said there was now more evidence of engagement by institutional investors as other real estate sectors became over-priced and impenetrable.