The Aberdeen Standard Pan-European Residential Property Fund (ASPER) has made its first investment in the UK, targeting the Birmingham market.
With an investment of approximately £60 mln (€67 mln), representing an initial yield of 4.25%, ASPER will forward fund the redevelopment of a 10-storey post office building into 259 apartments for private rental. The development is in partnership with Lionel House Developments, a development vehicle of specialist residential property firm Stamford Property Investments.
'This deal underlines our confidence in the UK private rented sector, which is set to increase by around 24% by 2022. Birmingham is a growing city experiencing high levels of investment over the last few years,' said Ed Crockett, fund manager at Aberdeen Standard Investments.
'Driven by strong underlying economic fundamentals and flourishing employment, the city’s vibrant residential rental market is showing robust supply and demand dynamics, which makes it a natural fit with ASPER’s investment criteria. We are confident that it will be one of the best build-to-rent schemes in Birmingham,' Crockett added.
The redevelopment will deliver one, two and three-bedroomed contemporary apartments on Lionel Street in Birmingham city centre. Early enabling works are already underway, with the 14-storey development expected to be completed in the summer of 2021. The apartments will be marketed and managed by JLL.
'This development is an exciting project for us and our third development in Birmingham. Having worked with the Council to secure planning for the regeneration of this prime site, we are delighted to be partnering with ASI and are looking forward to delivering a quality BTR scheme for them,' said Uri Goldberg of Stamford Property Investments.
ASPER was launched with an initial investment of €355.5 mln from eight investors in the Netherlands, Luxembourg and Switzerland in March 2018. The fund completed a second close in October 2018 raising a further €42.7 mln of commitments from investors in Ireland, South Korea and the Netherlands.
Since its launch, the fund has raised total equity of €398.2 mln with the intention to reach €1.5 bn in assets under management over the medium term.
Aberdeen Standard Investments’ current residential portfolio includes over 15,000 homes across Europe and the UK with an additional 3,400 units under construction and a combined total value of almost €6.5 bn.
Aberdeen Standard Investments said it intended to invest a further €2 bn in the European residential sector by 2022. It also plans to double its total real estate assets under management from the current level of €49 bn by 2025.
Dowbrae, Knight Frank and Hogan Lovells represented Aberdeen Standard Investments. Lionel House Developments was represented by DougraySmith and Teacher Stern.