DTZ Investors has forward funded a 260+ room scheme in Battersea for its co-living fund.
When completed it will be the third asset in the fund following the forward funding of The Collective Harrow and The Collective Earlsfield. The Collective Battersea will provide 35% affordable housing, available at discount market rent for people with starting salaries of £22,000 (£25,000) per annum.
Chris Cooper, CEO at DTZ Investors, said: 'Co-living as a sector has been remarkably resilient during the pandemic. The desire for human connection remains very strong and demand is highest in buildings that combine high quality living spaces with a wide range of communal amenities.
'The acquisition of The Collective Battersea marks another vital step toward fulfilling the investment strategy of our dedicated co-living investment vehicle, which now has a completed GDV of over £200 mln. Once fully capitalised, the fund’s portfolio of co-living buildings in prime locations across the capital will be home to 3,500 people.
'As well as providing shared spaces for people to spend time with one another and helping to tackle the loneliness problem, we are giving back through The Collective and the fund’s community investment programme to support local social, environmental and charitable projects.'
Sector momentum
This latest deal follows the launch of the fund, the world’s first institutional co-living investment vehicle, in October 2019 by DTZ Investors.
It aims to raise total equity commitments of up to £650 mln and to acquire, or forward fund, between six and ten co-living assets in London, with a target gross asset value of £1 bn across the life of the fund.
In July 2020 DTZ Investors announced that Merseyside Pension fund had joined other investors, including the Strathclyde Pension Fund, in investing.
ESG objectives
The fund is committed to delivering a sustainable housing solution that fosters diverse and supportive communities and promotes health and well-being, whilst delivering value for money for co-living residents, DTZ Investors said.
The Collective Battersea will achieve Breeam Excellent certification, aligned with other buildings in the fund. It includes a gym and studio spaces, which will facilitate events based around health and wellbeing, that can be utilised by the wider community, as well as roof terraces, and outdoor spaces providing immediate access to the River Thames.
Reza Merchant, CEO and founder of The Collective, said: 'We’re pleased to close this deal with DTZ Investors and the COLIV fund – a further demonstration of institutional demand for our vertically integrated co-living model. We strongly believe consumer demand for our product to be counter-cyclical, and we’re pleased to see this validated in the current challenging economic climate.
'We’ve seen continued robust enquiries and bookings across our portfolio throughout the pandemic, driven by consumers’ increasing prioritisation of value for money, convenience and human connection in their choice of home. The Collective Battersea will be one of a number of our projects to go into construction in central London in 2021, all offering one-of-a-kind shared spaces, an inspiring events programme, and a vibrant community to call home.
'Our mission is to build a global network of spaces that enable people to lead more fulfilling lives and positively impact the neighbourhoods they’re part of, and this highly sustainable development with subsidised rents for local people is another big step on our journey.'
