Invesco raises €328m at 1st closing of new UK resi fund

Invesco Real Estate (IRE) has announced the launch and first close of its dedicated, open-ended UK Private Rented Sector (PRS) fund with £250 mln (€328 mln) of investable capital, including debt, from five institutional investors in Australia, Canada and the UK.

IRE, which has invested around $16 bn (€14.7 bn) in the residential sector over more than 30 years, said the new UK PRS fund 'seeks to respond to the clear opportunity created by Britain’s growing imbalance in residential supply and demand'.

IRE’s PRS investment approach focuses on large-scale opportunities in recognised locations, within proven letting markets. IRE said it has an identified pipeline and is working to finalise its investment in a number of opportunities in the South East over the next few months.

'The PRS or ‘multi-family’ sector is an established and well-understood asset class in parts of Europe and North America/Canada, so we are particularly pleased to have attracted experienced investors from these regions to our UK PRS fund,' commented John German, IRE’s senior director of residential investment, responsible for spearheading the firm’s European residential expertise.

He added: 'They share our assessment of the attractive properties of this growing sector in the UK, including its low correlation with commercial real estate, equities and gilts; its long-term return profile; the relative stability of income the sector may offer and the potential diversification benefits it can provide as part of a mixed-use portfolio.'

With under 5% of the UK PRS owned by institutional investors in the UK (compared to over 25% in the US, for example) research by Invesco Real Estate earlier this year suggests that UK institutional investors are significantly underinvested in this fast growing and highest performing real estate asset class in the UK, noted Simon Redman, managing director – client portfolio management. 'The new fund seeks to respond to the clear opportunity by utilising IRE’s 30-year experience as one of the world’s largest and most experienced investors in the residential sector and applying it to the UK.'