Octopus on the hunt for BTR retirement partners for next later living strategy

Octopus Investments is exploring retirement BTR following the success of its retirement for sale strategies. To date, Octopus has amassed £500m of capital to invest into UK for sale retirement schemes. The company is now exploring partnerships with build-to-rent developers on rental later-living schemes in the UK. The company is currently building a later-living portfolio through its senior living investment partners JV with PIC that will invest up to £200m in equity to fund the development and operation of around 10 new retirement communities with a total GDV of £1bn. Octopus is also investing in later-living schemes with the UK Retirement Living Fund managed by Schroders Capital. Kevin Beirne, director and head of retirement at Octopus, told EG that it is interested “to invest in the right rental platform if that was available”. The investor is looking for partners with “a good track record, development and operational capability and are well capitalised”. Beirne added: “We are very keen on looking at new entrants or parts of the UK, which perhaps haven’t been exploited as much. “We are looking at high-quality sites and strong residential locations. We spent a lot of time underwriting looking at catchments and understanding the penetration rates required in that catchment to deliver a successful product. “There’s no one-size-fits-all but it is [whether we can get] older people with the right sort of wealth profile and right housing equity to make a retirement community work.” In terms of geographies, Octopus is targeting the North West, Cheshire and Manchester. Beirne added there is flexibility in terms of how the new partnerships will sit within Octopus’ portfolio. He said: “There is scope to think about how we structure things. In the near term it would fit into the funds that we’ve got, because it would be taking development risk on a relatively new product – we are a value-add opportunistic fund. “In the long term that might become an income-based forward-funding model, but not immediately.” Octopus’ schemes within its jv with PIC and its fund are operated by Elysian Residences and are for-sale properties. To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @AkankshaEG or @EGPropertyNews