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US investor Oaktree backs £700 million PRS push

Investor Oaktree Capital Management is planning its first foray into the UK’s private rented sector, and will start by building a 120 apartment scheme in Lochrin Place, Edinburgh. The company expects to leverage an investment of up to £700 million into the sector over the next three years.

Oaktree is planning to use its existing team at Knightsbridge Student Housing to bring forward the new developments, reports Property Week. The team has promised five private rented sector schemes will be revealed shortly, and have pledged to start seven new projects each year, building significant momentum in the sector.

“We really believe in PRS and believe it’s a great fit with our work in the student accommodation sector,” Knightsbridge chief executive Robert Crompton told the publication; and he said there was clear logic in the move. “Look at what we do. We build the units, we run the units and we know how to look after our customers already. We will be successful in PRS because we already do it in the student accommodation market. It’s a natural next step for us.”

Knightsbridge is said to be looking at cities including Bath, Bristol, Cambridge, Oxford and Manchester where there is a good flow of young working graduates coming out of local further education establishments. Through its customer facing brand, The Student Housing Company, the group already has close ties with its upcoming target market.

Oaktree’s commitment to the UK private rented sector is an interesting call. The company has investments across a range of businesses internationally; in the UK it has funds invested across a wide range of property assets, in everything from budget hotel group Travelodge through to serviced apartments, offices and warehouses.