Swedish investment group EQT Real Estate announced on Tuesday the launch of a joint venture with UK residential specialist Sigma Capital to create a £1 bn (€1.1 bn) investment portfolio of 3,000 build-to-rent (BTR) residential homes in Greater London.
EQT Real Estate and Sigma have initially committed equity of £300 mln and £16 mln, respectively, to the JV, which has been seeded with an initial portfolio of five projects with 361 homes from Countryside Properties located in the London boroughs of Ealing, Enfield and Havering. In addition, two further sites currently under development by Sigma in the boroughs of Barking and Dagenham and Havering will be acquired by the JV on completion.
These two sites together will comprise an additional 157 homes and are expected to be completed during H1 2021.
The initial acquisitions will be financed with a £50 mln loan facility from Homes England, the UK Government’s housing body that is responsible for increasing the number of new homes that are built in England and sponsored by the Ministry of Housing, Communities & Local Government.
The joint venture constitutes EQT Real Estate’s first UK investment, according to Rob Rackind, partner at EQT Partners and head of EQT Real Estate. ‘This joint venture with Sigma Capital marks an exciting entrance into the UK for EQT Real Estate as it represents the first transaction in this market since the business line was established in 2015,’ he said.
Peter Shacalis, director at EQT Partners and head of UK, EQT Real Estate said that the partners are ‘currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional BTR portfolio with robust and diversified rental income’.
Taylor Wessing acted as legal advisor for EQT Real Estate.
