EUROPE - Sweden's Akelius has closed a third deal in the UK residential market with the acquisition of 574 apartments worth £75.3m (€90m) from Terrace Hill.
The all-cash acquisition of units across 26 sites in London and the southeast reflects the not-for-profit foundation subsidiary's plan to acquire 10,000 assets in "key locations in and around London" over the next 3-5 years to coincide with a forecast macroeconomic recovery.
Akelius, which has €3.3bn in assets under management, plans to have built up its 700-asset UK portfolio to 1,000 assets by the end of 2012.
The transaction announced this week follows a November deal Involving 16 assets acquired from Terrace Hill and a £9m deal in December to acquire 81 units from UK residential developer Grainger.
CBRE, which has advised the foundation on both deals, has long identified a gap in the UK residential market for long-term investors - a gap Akelius hinted at when it said prospective tenants would be attracted to rental accommodation "where the landlord had long-term experience and a long-term investment horizon".
Terrace Hill's decision to sell follows the announcement in January that it would pull out of residential to invest in food stores, which it said would generate significantly higher returns.
Chief executive Philip Leech did not respond to requests to comment yesterday, but said in a statement that the divestment would allow the firm to divert capital into its development pipeline.
It plans to release more residential assets onto the market this year as part of its 18-month divestment programme.