Insurance giant Legal & General Capital and its joint venture partner, Dutch pension fund manager PGGM, have announced plans to build more rental properties in Greater Manchester, boosting its pipeline of build to rent homes to 800 across the UK.
The two companies joined forces in January to launch a £600m fund to build large-scale private rental housing across the UK, providing over new 3,000 homes.
The fund has so far committed £250m including its latest acquisition of a site in Salford from developer English Cities Fund (ECf), which has planning consent for 135 homes.
The scheme will be located by the river next to Spinningfields, within 200m of Salford Central station. Work is due to begin in April 2016, with practical completion to be delivered in March 2018.
L&G and PPGM's burgeoning pipeline is the latest example of the private rental sector gaining increasing interest from institutional investment as an asset class in its own right and as a source of stable long-term income for their funds.
The British Property Federation has estimated that there is at least £30bn investment ready to enter the build to rent sector, with more than 37,500 build to rent homes already in the planning system, under construction or complete across the UK.
James Lidgate, director of housing at Legal & General Capital, said: “Much has been made about generation rent, but for us this is about generation choice. We are proud of our philosophy for Built to Rent and will only invest in and develop purpose built schemes that offer renters a good quality, affordable choice that suits their personal circumstances and lifestyle.”
Bill Hughes, head of LGIM Real Assets, said: “With long term ownership at the heart of our designs, we will ensure that lifecycle costs, maintenance and management of these homes is considered right from the outset of our land acquisition process so that we can pass on a high quality service and good value costs to our residents.
Successful international comparisons, such as the Netherlands, Germany and US, demonstrate to us that the UK has a long way to go and we believe that through professionalising the private rental sector we are able to encourage better standards across the board.”