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Covid boosts investment in UK build-to-rent sector: KF

The Covid19 epidemic has helped to accelerate institutional capital targeting the UK’s build-to-rent sector according to Knight Frank.

The firm acted for Berkeley Square Developments which has signed its second forward funding agreement with investment manager Long Harbour for a project in the north London district of Tottenham Hale.

Ashley Road, Tottenham Hale, London.

Long Harbour will provide £156 million of forward funding, which will provide 315 homes for rent. Long Harbour also forward funded the first £70 million, 166-home phase of the Ashley Road Masterplan in May 2019.

The funds are being advanced on behalf of the Long Harbour Multi-Family (LHMF) investment programme. LHMF is a joint venture which said it aims to deploy £500 million of capital into BtR projects over the next 18 months. Its targets are BtR schemes of over 150 units in London, the South East and selected regional cities.

Investors attracted by BtR’s resilience to uncertainty

Peter Wyatt, head of build to rent and funding at Knight Frank, said: “Covid-19 has acted as a catalyst for an acceleration of institutional capital into the UK’s residential investment sector. Since March, we’ve seen a number of investors increasing their exposure in the UK market, thanks to its enduring resilience – especially during periods of economic uncertainty.”

Berkeley Square Developments’ second phase project will provide one, two- and three-bedroom apartments, two larger duplexes and 33 homes at discounted market rents.

“Covid-19 has demonstrated not only the resilience of the BtR sector as an asset class but the role that BtR will continue to play in delivering the housing need despite an economic downturn,” said Long Harbour’s managing director for LHMF Rebecca Taylor.

“The first phase of the scheme is on track to open doors in Summer 2021 and, as LHMF has significant capital to deploy, we are in active discussions with a number of development partners on sites across London and the UK’s core cities,” Taylor added.