DTZ Investors has forward funded a 310-room scheme in Earlsfield, London, for its co-living fund, in a deal requiring £70 mln (€77 mln) of total investment.
The Collective, which is the fund’s property and asset manager, will build-out and operate the development on Trewint Street, in the London Borough of Wandsworth. When completed it will be the second asset in the fund following the forward-funding of The Collective Harrow, which was announced when the fund launched in October last year.
The development will be funded with a mixture of equity, drawn down from the fund, and debt, which will be provided by alternative asset manager Cheyne Capital.
Chris Cooper, chief executive officer at DTZ Investors, said: ‘We launched our co-living fund last year with the aim of providing high quality, flexible and socially responsible housing in London. The development we are announcing today at Trewint Street in Earlsfield is a fine example of that aim. The Collective Earlsfield will provide 35% on-site affordable housing targeted at key workers’
Reza Merchant, chief executive officer and founder of The Collective, said: ‘The co-living asset class is demonstrating its resilience in the context of the Covid-19 pandemic and the current economic climate, and we remain focused on delivering our pipeline of projects in the UK and across continental Europe and the US.’
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.
The first acquisition was The Collective Harrow in Q4 last year. In July 2020 DTZ Investors announced that Merseyside Pension fund had joined other investors, including the Strathclyde Pension Fund, in investing. The fund is targeting further deals before the end of the year.
