Border to Coast Pensions Partnership has agreed to acquire a £400m (€466.8m) portfolio of UK single-family homes from Leaf Living, a provider founded by Blackstone and Regis.
The UK local government pension scheme (LGPS) pool, investing on behalf of its partner funds, is buying 12 estates comprising 866 homes across the South East of England, in a deal the pension pool said marks the largest single transaction in the UK single-family housing sector this year.
The property estates are located across Berkshire, Essex, Hampshire, Hertfordshire, Oxfordshire, Surrey, East Sussex, West Sussex and Wiltshire.
The acquisition is being made through the pool’s UK Real Estate Fund, which was launched 18 months ago and is backed by 15 of Border to Coast’s partner funds. The fund is expected to grow to around £3bn over the next 12 months as it continues to deploy capital.
Border to Coast originally launched the fund with £1.2bn in seed assets transferred from 65 existing holdings across three of its partner funds: Tyne and Wear Pension Fund, Cumbria Pension Fund and South Yorkshire Pensions Authority.
Border to Coast retains responsibility for the strategic direction of the vehicle, having appointed Aberdeen Investments to implement the strategy at the portfolio level.
Joe McDonnell, CIO, Border to Coast, said: “Our focus on high-quality residential property this year is helping reshape our real estate portfolio, future-proofing it for partner funds. Striking a deal of this size is testament to our partnership’s scale and expertise, and we are committed to providing additional value to the LGPS and its members.
“It is also a prime example of how deploying long-term capital can not only unlock access to strong structural opportunities but also contribute to tackling the country’s infrastructure challenges.”
James McLean, fund manager, Aberdeen Investments, said: “We are strong believers in the long-term UK single-family housing sector, underpinned by robust demand and a shortage of high-quality rental homes.
“At approximately £400m, this is one of the largest and most significant investments we’ve advised on, reflecting our conviction in the sector and our commitment to delivering resilient, long-term returns for Border to Coast’s partner funds while supporting the provision of much-needed homes across the UK.”
James Seppala, head of real estate Europe at Blackstone, said: “This transaction reflects strong UK institutional demand for high-quality rental housing platforms, which can offer stable long-term income.
“Patient institutional capital has an important role to play in bringing further investment into professionally managed housing across the UK and we are delighted to partner with Border to Coast on this important transaction.”
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