Invesco and M&G agree deal to fund London BTR pipeline

Global investment manager Invesco Real Estate and UK-based asset manager M&G Real Estate have agreed a three-year partnership with house builder Telford Homes to fund its pipeline of build-to-let developments in London.

M&G will be the group's priority partner for schemes of up to 200 homes, with an investment value of £75-£100 mln (€87-€116 mln), while Invesco is preferred for larger-scale projects. Telford Homes said the division was intended to match the partners' existing portfolios and ensure clarity and exclusivity in the bidding process.

M&G has already invested in two Telford Homes BTR schemes with a total of 275 properties worth £118 mln.

Telford Homes said that while the initial agreement was for three years, there was an expectation from all parties that it would be extended beyond this period.

'We have been consistent in highlighting our desire to significantly increase our build-to-rent pipeline over the next few years,' said CEO Jon Di-Stefano.

'Rental demand is increasing in London but the supply of new homes is still constrained. New generations are demanding better quality amenities, a better level of service and more flexible tenancies, all of which are offered by the growing institutionally owned build to rent sector.

'These compelling market fundamentals and the opportunity to de-risk our future pipeline with reduced capital investment give us confidence that these partnerships will help accelerate our aim to deliver a significant increase in our output of build to rent homes across London.'

Alex Greaves, head of residential investment at M&G Real Estate, said: 'Commercialising the production of homes to rent at scale with a like-minded, high quality developer of rental stock is another step closer to fulfilling M&G’s residential investment strategy.'

John German, managing director of residential investments at Invesco Real Estate, added: 'Our global institutional investors continue to believe in the fundamentals of the UK build to rent market and we still see an increasing appetite for the sector both in London and the wider UK market as it provides a key investment opportunity for a diversified investment portfolio.'

The process of selecting partners for Telford Homes was managed by Savills.

Andrew Brentnall, head of Savills UK residential capital markets, said: 'We received considerable investor appetite from around the world, yet again demonstrating the significant capital capacity for supporting the delivery of much needed homes across London.'

Invesco invests in direct property and publicly traded real estate securities with €57.3 bn of real estate assets under management, while M&G is part of M&G Prudential, a savings and investment business with total AUM of around €400 bn.


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