Oxford Properties to get into Get Living

Oxford Properties is in talks to buy a major stake in PRS company Get Living and its £1.5bn portfolio, write David Hatcher and Alexander Peace. The Canadian pension fund’s co-investment alongside existing owners Delancey, Qatari Diar and Dutch pension fund APG would see it take ownership of a chunk of the company’s 6,000-home portfolio spread across four sites, including the former Olympic Village in Stratford, E20. The transaction would help fund Get Living’s 4,000-home pipeline, which is expected to soon be expanded through other regional acquisitions. It has been targeting Birmingham in particular, where it has made the shortlist to redevelop Smithfield Market, which includes up to 2,000 flats. It will allow the existing partners to take some money off the table and gain exposure to a broader portfolio while not having to fund all of the projects by themselves. Given Oxford’s significant capital backing from its C$85.2bn (£50.2bn) parent Ontario Municipal Employees Retirement System, alongside the existing partners, this will provide Get Living with unrivalled firepower in the sector for new growth opportunities around the UK. If completed, the deal would be the first major institutional investment in an operational PRS platform and portfolio in the UK – Get Living has close to 2,000 income-producing units – and would be a massive step for the development of the sector. Delancey and Qatari Diar bought the Olympic Village, which was one of the most high-profile legacy commitments of the London games, in 2011. The initial 2,818 homes were built at a cost of £1.1bn, with 1,379 homes sold to Triathlon Homes in 2009 for £268m. The remaining 1,439 were then sold to Delancey and Qatari Diar for £557m in 2011, along with six adjacent plots. Given Delancey and Qatari Diar’s early entry into the PRS market, they have already gained considerable upside on their investment and the Stratford project is valued in the region of £1bn. Oxford has been considering a play for the UK PRS market for around a year but until now has not found an opportunity of scale. The property arm of Ontario Municipal Employees Retirement System has relatively ambitious target return requirements, achieving a net rate of return overall of 10.3% in 2016. This would be matched by the steady returns of Get Living’s standing assets as well as upside from the development projects. It would also allow it to recycle proceeds from the sale of assets such as its 50% stake of the £1.15bn Leadenhall Building, EC3, which was sold to CC Land last year. The portfolio Get Living’s portfolio is spread across four sites, with 6,000 units either built or in the pipeline. At the Olympic Park it has 1,439 completed homes, has 482 under construction and 2,000 planned. Elephant and Castle phase one comprises 374 completed homes and 278 student beds. Phase 2 will add a further 979 homes above the redeveloped shopping centre, but this has yet to gain planning consent. The Olympic Village and Elephant and Castle phase one are owned in equal partnership between Delancey, Qatari Diar and APG. Phase two of Elephant and Castle and acquisitions outside of London have been bought 50/50 by Delancey and APG. So far this includes the Globe Village site in Leeds, which can accommodate up to 700 homes, and Merchant City in Glasgow, which has consent for 600 units. The Get Living platform As well as the standing assets, Oxford Properties would also take a stake in the Get Living management company, which was set up to manage the Olympic Village site when Delancey took ownership after the 2012 Olympics. It is led by executive chief executive Neil Young, vice chairman Rick de Blaby, and non-executive chairman Stuart Corbyn. Young, who became chief executive in 2014, previously ran residential management advice and lettings firm Young Group. His senior team joined him in the move. Formerly chief executive of London residential developer United House Developments, de Blaby was appointed at the beginning of last year. He was chief executive at Hermes-backed MEPC for nine years until 2014. Corbyn joined Get Living in 2011. He was chief executive of Cadogan Estates until 2008, where he worked for 22 years and was widely credited with playing a major role in the redevelopment of the area around London’s Sloane Square and along Sloane Street, SW1. To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette To send feedback, e-mail david.hatcher@egi.co.uk or tweet @hatcherdavid or @estatesgazette