Pan-European asset management specialist BMO Real Estate Partners (BMO REP) has announced the first close for its newly developed UK housing strategy, the BMO UK housing fund, with a focus on affordable accommodation.
The fund is targeting around £500 mln (€588 mln) of equity and currently has a £250 mln investment pipeline for the provision of quality, purpose-built mid-market rental homes for local key workers.
According to BMO REP, the fund's social agenda and defined ESG and impact investment objectives have already attracted impact investors such as Big Society Capital.
Angus Henderson, head of business development at BMO REP said: 'This fund enables us to provide a much-needed housing solution to low and middle income earners while generating sustainable, inflation-linked long term income returns for investors.
'To achieve this, Home Group was very carefully selected as BMO REP’s development and operating partner thanks to its long term track record and deep seated experience in building and managing large scale housing solutions, with an emphasis on improving the private rented sector with a management responsible approach.'
As BMO REP's development and operating partner, Home Group will assist with the provision of integrated housing, by sourcing sites with the appropriate planning consents, as well as forming part of the platform for the ongoing property management and leasing operations.
BMO REP will act as investment advisor to the fund, responsible for capital raising and governance, as well as the underwriting and purchase of appropriate sites and assets, forward funding any construction.
Mark Henderson, CEO, Home Group said: “Expanding Home Group’s housing delivery model into the private rented sector through the relationship with the BMO UK housing dund and the utilisation of the ‘flexible rent’ leasing mechanism, we are able to offer the sector the potential to provide more of the homes we need at an affordable level with funding coming from the private sector.'
