UK local government pension schemes have committed £375m (€445m) to Heim Global Investor’s UK residential fund.
Fredensborg and Heimstaden’s living sector fund manager said its UK Residential Fund, for which they are seeking to raise £800m, has achieved its first close with initial commitments from the £60bn Northern LGPS Pool, which includes the Greater Manchester, West Yorkshire and Merseyside Pension Funds.
Andreas Oulie, CIO at Heim Global Investor, said: “The first close follows a sentiment shift in the real estate market during the second half of 2024, with strengthened institutional investor demand for residential due to reduced uncertainty and continuing strong fundamentals in our sector.
“Our new partners in Northern LGPS share our commitment to deliver new affordable rental housing on urban brownfield sites across the UK, and we are already working on a further equity raise, where we plan to onboard further investors in a second close later this year.”
Kevin Etchells, head of real assets at Greater Manchester Pension Fund, said: “With Heim we partner with a manager that brings a significant track record in scaling residential platforms across Europe. Heim shares our belief in the long-term fundamentals of building affordable rental products at scale.”
Darran Ward, head of alternatives at West Yorkshire Pension Fund, said: “The Northern LGPS Pool is providing significant and scalable investment into the UK housing market at a time of great need to increase the supply of new homes to meet the government’s ambitious housebuilding targets.
“The fund’s first investment has been made in one of our home markets, Leeds. We look forward to working closely with Heim to deliver much-needed housing solutions that benefit cities and communities across the Northern LGPS regions of Greater Manchester, West Yorkshire and Merseyside.”
The build-to-core UK residential fund invests in mid-market rental housing.
Christian Birrell, head of UK at Heim, said: “We are very active in the market with a pipeline of interesting opportunities that will scale our residential portfolio in 2025. The residential funding market has evolved substantially over the last two years, and we are seeing a high volume of deal flow that can deliver attractive risk-adjusted returns for the fund.
“With a shortage of development capital in the market today, we see 2025 as a great time to deploy our capital, as we move towards our target of building 5,000 new affordable rental homes across the UK with this fund.”
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