Malaysian developer Eco World International’s 70%-owned UK unit, EcoWorld London has announced that it has completed a deal with Invesco Real Estate to forward fund the development of 1,100 new UK build-to-rent (BTR) homes worth £400 mln (€440 mln).
The acquisition is being made on a forward funded basis which will enable EcoWorld London to recover its land cost upon exchange of contracts with the remaining construction costs financed by Invesco Real Estate, on behalf of an international separate account client, as works progress.
The homes are to be developed on sites at Kew Bridge in West London and Barking in East London, with each site forming the first phase of a wider development being undertaken by Ecoworld London. Construction work has commenced on both sites and the new homes will be available to rent from late 2020.
The deal - which was first signed over the summer - represents one of the biggest single commitments into London’s emerging residential investment sector, Ecoworld said in a statement.
As part of the agreement, Ecoworld London will let and manage the rental homes on behalf of the investor under a long-term contract.
Commenting on the deal, Heng Leong Cheong, Chief Executive of the Ecoworld London platform which launched in June this year, said: 'This deal is just the start of the EcoWorld International journey in the BtR sector. At present, each of the leading BtR companies in London has less than 5,000 homes under management. Through EcoWorld London our ambition is to secure a pipeline of over 10,000 homes in the next five years to become a BtR market leader.'
'Having made our first residential investment with the team that now forms part of Ecoworld London in 2014, we are delighted to continue our partnership with Ecoworld London on this next step in our growing UK and European residential strategy which has now reached just under £1 bn in the UK and £750 mln in Europe,' added John German, senior director of residential investments at Invesco Real Estate.
The deal is the second acquisition in 2018 in the UK for IRE's separate account client and their first in the UK BtR sector.
