UK – Prupim chairman Martin Moore says he has not ruled out UK-wide residential investment following the company's £105.4m acquisition of a 534-asset housing portfolio from the Berkeley Group.
Describing the Berkeley Group deal as "a vote of confidence" in the sector, Moore told IP Real Estate the firm would remain open-minded on location – and would consider investing in development projects.
The deal announced by Prupim this week comprises of portfolio largely made up of assets in London and the southeast.
“Where this portfolio is, the market has a certain dynamic – it’s buoyant," Moore said.
"We’d have different considerations in other parts of the UK but we wouldn’t rule out investing in them. In commercial real estate, you often find the less fashionable or well researched parts of the market throw up the best opportunities.
"This is a completed portfolio and almost fully let. But it might also make sense to look at funding developments."
However, Moore ruled out immediate additional acquisitions, saying the asset manager would first focus on stabilising the newly acquired portfolio.
"We’re taking it one step at a time," he said. "Never say never – but in the next few months, no."
Berkeley Group will retain a minority co-investment in the portfolio. Although Moore did not confirm the developer’s co-investment had been a condition of the deal, he said it was "a reaffirmation of their confidence in the portfolio.
He added: "It’s a huge positive that they’re willing to leave money in it. We’re taking on the portfolio’s management but [their continued participation] made sense to both of us."
A state subsidy channelled through the Homes and Communities Agency (HCA) kickstarted the development project back in 2010. But asked whether a similar subsidy would be necessary to get future projects off the ground, Moore demurred, citing this deal and the recent joint venture between APG and UK developer Grainger as evidence of "nascent institutional interest" in UK residential.
