EQT Real Estate has entered London’s residential market by way of a partnership with Sigma Capital Group to invest £1bn (€1.1bn) in new build-to-rent (BTR) homes.
EQT Real Estate and Sigma have initially committed £300m and £16m respectively to the newly formed joint venture which plans to deliver its assets over a period of at least five years.
EQT Real Estate said the venture has secured five projects with an aggregate of 361 homes from Countryside Properties. In addition, two further sites currently under development by Sigma will be acquired by the joint venture on completion.
These two sites together will comprise an additional 157 homes and are expected to be completed during H1 2021.
Peter Shacalis, director at EQT Partners and head of UK, EQT Real Estate, said: “EQT Real Estate is thrilled to be entering the London residential market, one with a severe supply shortage of professionally managed, high-quality, good value homes to rent, with Sigma Capital.
“In addition to the initial seven schemes, we are currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional BTR portfolio with robust and diversified rental income.”
Rob Rackind, partner at EQT Partners and head of EQT Real Estate, said the joint venture with Sigma Capital marks an exciting entrance into the UK for EQT Real Estate as it represents the first transaction in this market since the business line was established in 2015.
“I cannot think of a more compelling investment opportunity at the moment than to deploy capital into this high conviction strategy, and one that should deliver significant social impact, by providing market-rate housing to renters in affordable locations within Greater London and its commuter towns with strong transport links.”
Graham Barnet, CEO of Sigma Capital, said: “We are delighted to be expanding our delivery of new rental homes in the UK with the launch of our London-focused joint venture with EQT Real Estate, a strong and visionary partner.”
Barnet said Homes England, which has supported Sigma with every major initiative to deliver the new housing that is much needed across the country, is also providing invaluable backing to the joint venture.
To read the digital edition of the latest IPE Real Assets magazine click here.