London real estate firm DTZ Investors will provide £70m for a new “collective living” development, in a show of confidence in the capital’s rental market despite the impact of the coronavirus crisis.
The Earlsfield development will be the second property delivered through the fund set up last year by DTZ Investors and co-living firm The Collective to provide flexible housing in London.
The rental model, which is aimed at millennials working in London, sees tenants rent individual rooms and share facilities.
The investment comes as rents in London have fallen as home-working during the coronavirus pandemic has made living in the capital non-essential for many employees.
It follows the forward-funding of The Collective’s property in Harrow, which was announced when the fund launched in October last year.
The project in Earlsfield will be funded by equity drawn down from the fund and debt, from alternative asset manager Cheyne Capital.
The Collective chief executive and founder Reza Merchant said: “We are excited to progress The Collective Earlsfield through to construction in partnership with DTZ Investors under the Coliv fund.
“We’ve been impressed with the proactive approach taken by Wandsworth Council to unlock the delivery of this project.
“The co-living asset class is demonstrating its resilience in the context of the Covid-19 pandemic and the current economic climate, and we remain focused on delivering our pipeline of projects in the UK and across continental Europe and the US.”
The development will include 35 per cent of affordable housing targeted at key workers, DTZ Investors chief executive Chris Cooper said.
Coliv – which is the first institutional large-scale co-living fund – is seeking to acquire or fund between six and ten developments in the capital over a ten year period.