PGGM and Legal & General Capital are to build more homes as part of their UK residential joint venture.
The Dutch pension fund manager and Legal & General Capital are looking to invest £600m (€790m) in the UK’s private-rented sector (PRS), as reported in January.
A site in Salford has been bought from developer English Cities Fund (ECF), taking the joint venture’s current pipeline to nearly 800 new homes, with a total capital commitment of more than £250m.
L&G said the leasing by law firm Freshfields Bruckhaus Deringer of 80,000 sqft at nearby One New Bailey would bring more residents to the area.
Bill Hughes, head of LGIM Real Assets, said: “Successful international comparisons, such as the Netherlands, Germany and the US, demonstrate to us that the UK has a long way to go, and we believe that, through professionalising the private rental sector, we are able to encourage better standards across the board.”
Mathieu Elshout, real estate investment director at PGGM, recently said investing in residential was the “perfect long-term real estate investment”, as it provides “relatively high income security and diversification relative to other sectors”.
The partnership will initially look to provide more than new 3,000 homes, with further schemes in Bristol and Walthamstow, London.
A cleared development site in Bristol was bought for £4.8m in February from Square Bay, the joint venture’s first deal.
The site has planning consent for 168 units.