London-based investor-developer Avanton has created a £500 mln (€573 mln) blind pool fund to invest in strategic land acquisitions in the UK capital over the next three years, as it targets expansion into the build-to-rent (BTR) sector.
The investor-developer, which is already an established operator in the residential build-to-sell market, said it had identified significant BTR opportunities across inner London. The new fund includes a combination of investment from Avanton, plus monies raised from a number of Avanton’s bank funders.
Omer Weinberger, CEO of Avanton, said: 'The only viable solution to London’s housing crisis and the shortage of supply of new homes in the capital is delivering multiple tenure schemes and expanding BTR, intermediate and social housing provision.
'This is why Avanton is currently undergoing a three-year expansion into the build-to-rent and mixed-tenure sectors. To implement this we have set aside £500 mln and are seeking attractive land opportunities to grow our BTR development pipeline yet further.'
Avanton specified that the capital will be used to buy land, buildings or sites, with additional funding drawn upon to actually build the developments. The firm intends to retain the built out assets, and then use a company to manage the properties for them.
Key destinations
Locations such as Islington, Southwark, Wandsworth, Wimbledon, Hammersmith, Lambeth, Camden and Brent are currently under scrutiny with a view to delivering up to 5,000 build-to-rent units between 2021 and 2023. Avanton said it would focus on acquiring sites with land values of £20 mln to £100 mln, providing for between 300 to 1,000 units per BTR development.
The firm has already lined up several build-to-rent pipeline projects. In Richmond, Avanton and partner ICG have a newly consented £250 mln (gross development value) urban-village development, supplying 453 homes on a former Homebase site off Manor Road.
Likewise on Old Kent Road in Southwark, Avanton has consent for the £730 mln (GDV) Ruby Triangle project which will provide 1,414 new homes, of which circa 50% will be build-to-rent. The firm has a third pipeline site in the London Borough of Brent which will allow for 500 build-to-rent units.
David Ronson, sales & marketing director of Avanton said: 'We are seeking to expand our build-to-rent, mixed tenure and private sale portfolios because despite the obvious challenges, the property market has been extremely resilient and recovered rapidly last year after the lockdown.
'This year the market sentiment has been cautiously upbeat as the UK has taken a global lead in the vaccine rollout and we see great opportunity at this moment in the property cycle.'
