Legal & General’s alternative asset platform has added a suburban build to rent (SBTR) business to its UK direct investment programme.
Legal & General Capital (LGC) said the newly launched SBTR arm will partner with UK housebuilders and undertake a direct delivery programme to bring forward over 1,000 homes each year from 2024.
Headed by Simon Century, the SBTR arm expects to develop large scale single family rental communities in suburban locations across the UK.
Century, who has led the investment and scale-up of a number of major housing businesses, such as Legal & General Affordable Homes, will be supported by David Reid as managing director. Reid joined Legal & General from Rowan Asset Management in January 2020.
LGC said the wider SBTR team is now being established, seeking talent from a diverse range of backgrounds including investment, operational and residential development sectors.
Nigel Wilson, CEO of Legal & General, said in light of the pandemic, it is more important than ever that “we deliver the houses that our society needs to address structural shortages” across every dimension of the market.
“We are still falling far short of the over 300,000 new homes needed each year. To support this growing need, Legal & General has deployed institutional capital at scale to revolutionise affordable housing, later living, the urban rental market, build to sell and to speed up construction through modular housing.
“It’s now time that we play a significant role in the suburban single-family rental housing market. Legal & General have the will, the capital and the deep sector knowledge to invest and drive real impact.”
Reid said build-to-rent as a sector has consistently demonstrated value to investors, delivering robust and defensive income streams, suitable for patient capital investment.
“It has shown significant resilience throughout the current crisis with strong rental collection and occupancy rates. With working practises and demands changing rapidly, this is an appropriate time to broaden Legal & General’s BTR investment, into the suburban single-family housing market.”
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