UK fund seeks £600m for green BTR scheme

Investment manager Kös-e Life is looking to raise up to £600m to plough into carbon-neutral rental houses. The UK fund, launched by build-to-rent veteran Richard Berridge and former government PRS task force adviser Paul Belson, will focus on BTR family homes. It will seek to deliver 2,400 sustainable houses in suburban locations across the UK. The fund is targeting returns of 7.5-8% per annum, with a gross yield of around 6% subject to location. Kös-e Life has agreed a five-year partnership with LSL Property Service’s PRSim to manage the properties. It will acquire net-zero housing from SME developers and leverage third-party partnerships to deliver green consumer products for families. Kös-e Life will seek to acquire sites of up to 70 houses, making up no more than a third of a development. It is developing a management platform to help tenants live a sustainable life beyond the four walls of their homes. The online platform will provide access to environmentally conscious brands, including sustainably produced local food, ethical cosmetics and electrical vehicles. The name Kös-e Life comes from the Norwegian word “kos”, meaning to have a good time, combined with “e” emphasising the eco-friendly quality of the homes. Berridge, founder and director at Kös-e Life, said: “Sustainability is going to be an imperative for housing in the future. “Houses are popular and they are easy to build to a net-zero specification, with low-energy use for sustainable living. We are ahead of the curve at the moment but investments in the future will be graded in terms of environmental, social and governance strength.” Katherine Rose, director of PRS and build-to-rent client services: “Net zero and sustainable housing is an area that PRSim is seeing an increase in interest from institutional investors and it is critical that carbon neutral schemes are developed. There is not only a huge benefit from an environmental perspective, but also a benefit to landlord and tenants.” She added that BTR housing has a faster “lease-up” rate through high demand for this accommodation, with longer occupancy and a reduction in voids and maintenance costs. To date, BTR developers have tended to focus on amenity-rich city-centre apartments over family rental housing. According to Savills, some 129,800 BTR units are in apartment-led schemes (88%), with just 9,400 (6%) in housing, of which only 3,000 are completed. This market is dominated by Sigma Capital, but more are moving to housing, including Grainger and M&G Investments. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette