UK-focused real estate investment manager Moorfield Group is planning to invest more than £500m (€577m) in residential-for-rent properties on behalf of a new real estate investment trust (REIT).
The new vehicle MREIT, which is aimed at institutional investors such as pension funds and insurers, has so far raised £100m and is targeting more than £500m of investment capacity.
Moorfield said MREIT will initially target the acquisition of existing and newly-built single-family homes and student houses of multiple occupation (HMO).
The manager said MREIT’s current portfolio comprises £50m of investments made so far by Moorfield’s fifth value-add fund, which is split approximately 50:50 between single-family homes and student HMO.
Charles Ferguson Davie, CIO at Moorfield Group, said: “We believe that MREIT’s acquisition strategy will offer an attractive exit option for buy-to-let investors looking to sell, as well as housebuilders that are increasingly considering bulk sales in the face of a weakening for-sale market.
“We are targeting locations with strong underlying demand, identified for our core demographics – long-term renters and domestic students – but where new supply is limited to ensure that MREIT benefits from sustainable rental growth.
“The success of US single-family REITs demonstrate a way forward for institutional investment into UK residential-for-rent and we are confident that MREIT will help unlock this asset class, which has been difficult for institutions to access due to the granularity and fragmented ownership of existing stock.”
Sadie Malim, head of special projects, ESG and legal at Moorfield Group, said: “By focusing on upgrading existing assets to be in line with modern environmental and management standards, alongside acquiring newly-built units, MREIT will enable institutional investors to contribute to the greening of the UK’s built environment.”
Marc Gilbard, CEO at Moorfield Group, said: “Through MREIT, we are pleased to offer institutional investors another route to access a necessity-driven asset class with sustainable rental growth that has typically tracked inflation.
“UK residential has been one of our longest – and strongest – conviction themes, with demographic tailwinds and a stark demand-supply imbalance continuing to underpin values and support resilient rental growth over the long-term.”
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