Legal & General Investment Management Real Assets (LGIM Real Assets) has raised a further £170 mln (€200 mln) of equity investment from major institutions to reach £1 bn (€1.2 bn) of investment capacity for its open-ended Build-to-Rent (BTR) fund.
The fund aims to open up the rental market to long-term pension and institutional investors, sitting alongside £600 mln (€700 mln) of investment made by Legal & General Capital and PGGM in 2016.
'It is very pleasing to attract such significant institutional investment into our Build to Rent platform. We have a housing crisis in the UK, and only with institutional funding can we deliver the new homes the country needs,' commented Mike Barrie, director of fund management at LGIM Real Assets. 'We have already secured £1 bn in funding, delivering 1000 new homes either in planning or under construction, from a standing start in 2016. We are creating new jobs in the UK, and stimulating economic growth, and in 2017 we’ll also have our first new tenants moving into much needed new homes.'
The homes under construction or in planning are located in Bristol, Salford and Walthamstow, while the platform also has a pipeline of future projects in Birmingham, Leeds and London.
In January 2016 LGIM Real Assets worked with Legal & General Capital, the Group’s principal investment arm, and PGGM, the Dutch Pension Fund, to build an initial 3,000 homes for rent across the UK.
'Legal & General is active in all parts of the housing market: build to rent, build to sell, student accommodation, modular construction, building new housing communities, and we’re also looking at purpose built retirement housing,' said James Lidgate, director of Housing at Legal & General Capital. 'There is a shortage in all types of housing tenure in the UK, and Legal & General Capital will deploy long-term investment capital with external partners, or with LGIM Real Assets to deliver modern, energy efficient, homes.'
LGIM Real Assets said it wanted to provide a new institutional class of specifically designed rental accommodation, which, based off fair value market rents, would deliver higher quality space and more professional standards of tenant service.
Led by Dan Batterton, BTR Fund Manager, LGIM Real Assets has made several appointments this year to create a six-strong BTR team working on the platform.
