Internos Global Investors has formed an alliance with Catalyst for Homes (C4H), a community interest company, to explore the formation of a range of investment vehicles that will enable institutions to invest in the UK residential rented market.
Internos Global Investors has formed an alliance with Catalyst for Homes (C4H), a community interest company, to explore the formation of a range of investment vehicles that will enable institutions to invest in the UK residential rented market.
Internos and C4H are evaluating 152 residential development sites across Greater London with a view to selecting the most attractive for the institutional market. Suitable sites are likely to provide asset management potential and up to 30-year income returns, the companies said in a statement.
According to the Investment Property Forum's seminal research in 2014, the UK private rented sector is worth around £837 bn (€1.1 trn), of which only 2%, or £18 bn, is currently in the hands of institutional investors – the vast majority being held by private amateur landlords. This compares to the UK commercial property market where more than 56% of the £647 bn estimated value is owned and professionally managed by institutions.
'This disparity provides a significant opportunity to grow institutional investment with professional management in this previously overlooked market,' commented Andrew Taylor, head of UK residential investment at Internos. 'Couple this with a worrying outlook for global equity and fixed income returns and the UK residential market provides an attractive proposition for risk-averse/return-hungry investors.'
C4H was founded in 2010 by Clive Bird (former Taylor Woodrow and Berkeley Group) in 2010 and is chaired by Adam Sampson, (former CEO of the housing organisation Shelter). C4H’s principal aim is to channel large-scale institutional investment to create sustainable mixed tenure communities.
Adam Sampson, executive chair of C4H, said: 'The returns from residential investment over the past decade have significantly outperformed comparable markets. The alliance with Internos provides an opportunity for increased access to this market for investors at the same time as addressing the desperate shortage of affordable housing which affects both individuals and the economic health of the nation.'
