Telford Homes has agreed an investment partnership with Invesco Real Estate and M&G Real Estate to help increase the London housebuilder’s build to rent (BTR) pipeline.
Telford Homes said following a selection process, managed by Savills, it has chosen the Invesco and M&G as its long term strategic BTR partners for forward fund transactions.
Both Invesco and M&G have signed partnership agreements for an initial three year period.
M&G will be Telford Homes’ priority partner for schemes including up to 200 BTR homes and Invesco will have priority for more than 200.
The company estimates around £75m (€87.2m) and £100m capital investment for the 200 homes.
Telford Homes said it will continue to work with other investors, especially where they bring “opportunities to us or on sites that do not fit the criteria of either Invesco or M&G”.
Jon Di-Stefano, CEO of Telford Homes, said: “We have been consistent in highlighting our desire to significantly increase our build to rent pipeline over the next few years.
“It is, therefore, a major step forward for us to announce that we have attracted these two extremely well-respected, experienced and ambitious institutional investors as long term partners.”
The new partnership builds on M&G’s existing relationship with Telford Homes, having previously invested in two of the group’s schemes totalling £118m for 275 BTR homes.
Alex Greaves, the head of residential investment at M&G Real Estate, said: “We are delighted to formally cement what has been an excellent working relationship with Telford over the last three years.
“Commercialising the production of homes to rent at scale with a like-minded, high-quality developer of rental stock, is another step closer to fulfilling M&G’s residential investment strategy.”
John German, MD of residential investments at Invesco Real Estate, said: “The alignment of our respective strategic objectives to both develop the UK build to rent sector and to seek to redress the supply/demand imbalance that exists today, makes for an exciting collaboration and we look forward to working closely with the Telford Homes team to deliver market leading projects.”
Since 2014, Invesco has invested around £1.5bn in the development of 5,000 BTR homes on behalf of international institutional investors.
The target is to increase its UK BTR exposure to at least £5bn over the next five years with around 60% weighting to investing in London and the South East.
“Our global institutional investors continue to believe in the fundamentals of the UK build to rent market and we still see an increasing appetite for the sector both in London and the wider UK market as it provides a key investment opportunity for a diversified investment portfolio,” German said.
Andrew Brentnall, the head of Savills UK residential capital markets, said: “Unsurprisingly for a partner of Telford’s quality, we received considerable investor appetite from around the world, yet again demonstrating the significant capital capacity for supporting the delivery of much-needed homes across London.
“We will continue to support Telford Homes, M&G and Invesco, to aid the success of the partnerships for the long term.”
