UK real estate fund manager Moorfield Group and proptech residential investment platform Bricklane have established a partnership that is targeting a £600 mln (€700 mln) UK portfolio of professionally managed homes for rent.
The partnership, which represents the most significant technology-driven investment in the UK’s residential market to date, will focus on unlocking the institutional potential of existing stock, with the investments to be acquired and managed by Bricklane through its proprietary technology platform, Compass.
The Partnership aims to acquire around 2,000 one to four bedroom houses and flats over the next 24 months with an initial focus on London, Bristol and the South East. Using Bricklane’s technology, the partnership will target attractive sub-markets with deep granularity, using bottom-up data to acquire rental properties that are expected to outperform in those areas at an unprecedented scale. Once units are acquired, the partnership will seek to grow income and capital values through active asset management and refurbishment, with the aim of delivering a professional, high quality proposition for tenants.
By focusing on existing properties, in particular the 98% of the rental market owned by the UK’s 2.5 million buy-to-let landlords, the Partnership expects to deliver attractive risk-adjusted returns, while also avoiding the carbon-cost of demolition and construction. This partnership sees the UK beginning to follow the example of the US single-family residential market, in which institutional investment in existing granular properties has scaled from near $0 to $40 bn in ten years.
Bricklane specialises in acquiring and managing granular residential for rent across the UK, with existing portfolios in London, Leeds, Manchester and Birmingham.
Moorfield, an early investor in the living sector, has expertise in purpose-built student accommodation (Domain – since 1997), retirement living (Audley – since 2008) and Build To Rent (More. – since 2012).
Ross Netherway, head of origination at Moorfield Group, said: ‘This Partnership will help further diversify our activities in our ‘beds’ theme and see us drive the professionalisation of a vast but fragmented market.’
Simon Heawood, CEO and Co-Founder of Bricklane, said: ‘The time is ripe for institutional capital to access and professionalise the mainstream Private Rented Sector. Demand is at an all-time high, while it is becoming less financially attractive for individual landlords to operate in the sector. US operators have shown the potential of granular investment at scale and we believe that the UK’s population of renters deserves properties in which they can be truly at home.’
