Investor M&G Real Estate has confirmed it has forward funded a £43.5 million development of flats for the private rented market, at a site in west London. It has backed developer HUB which will create 152 private rental homes in Acton.
The project will be held within a strategic fund being developed by M&G which kicked off in 2013 with the purchase of a portfolio of properties from Berkeley Homes. The challenge of finding suitable large scale private rental projects to invest in has led M&G to put funds into what might, in other property sectors, be considered a speculative development. However, such is the demand for private rented homes, there is minimal risk on the project, which is likely to let fully at market rents the moment it is completed.
“With this deal now complete, we are looking for more opportunities to fund mid-market developments via our fully scalable UK residential strategy,” said M&G’s Alex Greaves. “Hopefully deals like this will encourage more institutional investment into the sector and bring forward much needed housing stock.” It is understood the Acton project took around nine months to complete, so it is more than likely M&G has other investments in its project pipeline.
“For far too long, renting has been seen as a stepping stone to home ownership and, at times, a backward step,” said Greaves. “These 152 built-for-purpose rental homes are a clear statement that renting can be the tenure of choice for an upwardly mobile workforce who require the flexibility of renting, but who also want high quality service and support, to feel abut to lay down roots and settle for longer should they wish.”
The Victoria Square scheme will include a mix of one, two and three bed apartments in a scheme designed by Newground Architects, which is part of a wider regeneration scheme being supported by Ealing council.