EcoWorld and Invesco finalise £400m PRS development deal
Invesco Real Estate has finalised its £400m deal to forward fund the development of 1,100 new homes for the rental market in the capital with EcoWorld London.
The deal on behalf of one of Invesco’s international separate account clients, which is making its first residential investment in the UK, allows EcoWorld London to recover its land cost upon exchange of contracts, with the remaining construction costs financed by Invesco Real Estate, on behalf of its client, as works progress.
The deal follows on from EcoWorld’s acquisition of sites at Kew Bridge, West London, and in Barking, East London, through its 70% purchase of Wilmott Dixon’s residential business Be Living in November last year.
Invesco Real Estate has finalised its £400m deal to forward fund the development of 1,100 new homes for the rental market in the capital with EcoWorld London.
The deal on behalf of one of Invesco’s international separate account clients, which is making its first residential investment in the UK, allows EcoWorld London to recover its land cost upon exchange of contracts, with the remaining construction costs financed by Invesco Real Estate, on behalf of its client, as works progress.
The deal follows on from EcoWorld’s acquisition of sites at Kew Bridge, West London, and in Barking, East London, through its 70% purchase of Wilmott Dixon’s residential business Be Living in November last year.
Construction has begun at both sites, and the new homes will be available to rent from late 2020.
As part of the agreement, EcoWorld London will let and manage the rental homes on behalf of the investor under a long-term contract.
The deal marks EcoWorld London’s first step in its plans to become a leading provider of rented homes in the capital within the next five years.
Heng Leong Cheong, chief executive of EcoWorld London, said: “This deal is just the start of the EcoWorld International journey in the build-to-rent sector.
“At present, each of the leading BRR companies in London has fewer than 5,000 homes under management. Through EcoWorld London our ambition is to secure a pipeline of more than 10,000 homes in the next five years to become a BTR market leader.
“With this in mind, we are exploring the launch of a new operating company focusing solely on rented homes. Our ambition, coupled with this deal with Invesco Real Estate, reinforces our commitment to supporting the UK’s efforts to address the housing shortage across London and the South East of England”
Tan Sri Dato’ Sri Liew Kee Sin, executive vice-chairman of EcoWorld International, added: “This is a fantastic start to EcoWorld International’s ambition of becoming a BTR market leader in the UK.
“BTR is the most resilient and fastest-growing property sector in London today, owing to the chronic undersupply of affordable homes available for rent – particularly along the commuter belt, where EcoWorld London’s projects are located.
“With large international funds now actively pursuing good-quality BTR opportunities in the UK, the sector’s growth prospects will be even brighter. This underscores our confidence that whatever the outcome of the Brexit negotiations, the BTR market is recession-proof and will continue to strongly outperform other market segments well into the foreseeable future.
Invesco Real Estate senior director of residential investments John German said: “Having made our first residential investment with the team that now forms part of EcoWorld London in 2014, we are delighted to continue our partnership with EcoWorld London on this next step in our growing UK and European residential strategy, which has now reached just under £1bn in the UK and £750m in Europe.
“Invesco Real Estate will now have in excess of 2,000 BtR units under construction across the UK, highlighting our growing commitment to this investment asset class.
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