The BMO UK Housing Fund has completed the acquisition of the Hughes House scheme in Liverpool city centre, through a £40 mln forward funding agreement (€47 mln), signalling the first round of deployment for the fund.
The agreement will provide 258 new homes for the city, across 144 one-bedroom apartments, 99 two-bedroom apartments and 15 studio apartments. The scheme comprises a mix of market rent and discounted rent units.
Located on London Road, the scheme sits within the local regeneration and employment initiative known as the Knowledge Quarter & Fabric Quarter. Home Group Developments sourced the project and is the main developer working with UK Land and Property and Equans (part of Englie Group) to build out the scheme.
Peter Lowe, fund manager at BMO Real Estate Partners, the investment advisor to the fund, said: 'This acquisition provides us with an opportunity to support the delivery of affordable private rental housing in Liverpool while also generating sustainable, inflation-linked long term income returns for investors.
'The scheme will enable us to satisfy local demand, particularly from key workers employed within the local authority, city centre hospitals and nearby universities.
'We expect to follow up this acquisition with a further pipeline of near-term opportunities as we continue to support the delivery of affordable housing solutions across the UK.'
The fund aims to address a gap in the UK housing market by delivering high quality, sustainable, community based rental property, targeted at low to middle income households whose needs are not currently being met by the existing private rented sector. The fund’s investment strategy is focused on local housing needs and will invest across house types including city apartments and suburban housing.
Richard Kirby, head of UK, BMO Real Estate Partners said: 'We’re proud to utilise our responsible investment credentials in partnership with Home Group to promote private capital’s role in delivering and operating long term rental properties for local key workers.
'It is also important that while this Fund has clear social objectives it aligns to our philosophy of creating sustainable real estate by also prioritising environmental considerations and promoting sustainable living, ultimately creating thriving communities for the long term and supporting income generation for our clients.'
Allsop supported the transaction and CBRE are the valuers.