As the private rented sector grows, it becomes increasing evident that others besides the small-scale private landlord want a slice of the action. The success of buy-to-let, faced with continuing growth of rental demand, is persuading investment managers to target private rented homes as an asset class worth investing in.
The latest example of this is Cording Real Estate Group’s proposal to put money into this growing PRS sector.
The company buys Northern European real estate for investors and has decided to launch the new business after buying out specialist investment firm CapRes.
Rodney Bysh, Cording’s chief executive, said that feed-back from his company’s clients has shown that there is “significant appetite to invest in housing in the UK, especially as young people struggle to secure mortgages, pushing them into rented accommodation.”
“There’s a shortage of housing in this country and strong demand.
“There are lots of institutional investors out there who are used to investing in this sector in other countries who want to invest in the UK.”
Mr Bysh added that while the vehicle will target an initial £200m of investment, it could grow to as much as £1bn in the coming months.
Generation Rent, those aged between 25 and 35 have increasingly turned to renting their accommodation as they struggle to get the mortgages necessary to get onto the property ladder
Traditionally a market for small-scale landlords investors, there is a move to corporatize the sector, thought there is a long way to go is institutional investors own no more than around 3% of the property stock at present.
Other investment firms including M&G and LaSalle Investment Management have dipped into the growing sector encouraged by government incentives to expand it through more institutional investment.
Tim Holden and Charlie Miller, CapRes’ founders, will head Cording’s new platform. Mr Holden has said:
“Our starting point has to be between 1,000 and 5,000 units in order to achieve economies of scale. We’re trying to provide a product for investors which is fundamentally sustainable, so we’ll be looking to grow it incrementally.”
Cording says it intends to acquire both existing residential buildings and sites which will be developed for rented housing to meet a range of investor requirements.
More funds flow into private rentals https://t.co/5mAJrVgYsR
— LandlordZONE (@LandlordZONE) November 30, 2016