The Newcastle-headquartered Grainger plc is continuing to take advantage of opportunities in the London property market with the forward purchase of a new build-to-rent scheme for £33.25m.
The firm, which is the UK’s largest listed residential property owner and manager, bought the 90,000 sq ft asset through the GRIP Unit Trust, a market-let residential property fund it owns in partnership with APG, Europe’s largest pension fund asset manager.
The 16-story residential tower in Canning Town will provide 134 one and two-bedroom apartments, 25 car parking spaces and 4,173 sq ft of resident amenity space.
Purpose-built to provide accommodation for private renters and to optimise property management efficiency, the development forms part of the wider Hallsville Quarter masterplan, a mixed use regeneration project being undertaken by Bouygues Development in partnership with the London Borough of Newham.
Bouygues, which is also the developer of the scheme, has retained a stake in the ownership of the asset, and will manage the development and construction process.
Grainger, meanwhile, will assume full management responsibilities following practical completion, including property management, lettings, facility management, and fund and asset management.
Construction is scheduled to begin this month and conclude in the summer of 2017.
The transaction represents the third collaboration between Grainger and Bouygues Development, the companies having already worked together on developments at London Road, Barking, and at Pontoon Dock. GRIP was formed in 2013 to invest in predominantly stabilised, market-let residential blocks and portfolios focused on London and the South East, with additional scope to invest in build-to-rent development opportunities.
Grainger provides fund, asset and property management services to the trust.
Tracey Hartley, the company’s GRIP Fund Manager, said: “This transaction builds on an established partnership between Bouygues Development and Grainger and is further evidence of our commitment to the UK private rented sector. We now look forward to working alongside Bouygues Development and the London Borough of Newham to deliver this exciting new long-term development.
“The demand for high-quality rented homes far outweighs supply, and PRS represents a long-term rental income and a stable yield for our investors. In line with our strategy, and with the financial support of Grainger and APG, GRIP will continue to explore further investment opportunities including build-to-rent, enabling us to offer the growing number of renters top-quality and professionally managed housing that puts the tenant first.”
Nicolas Guerin, managing director of Bouygues Development, said: “We are very pleased to close our second build-to-rent transaction in partnership with Grainger, with whom we have worked from concept design stage to create a bespoke PRS product of high quality in the exciting new mixed-use regeneration of Canning Town.
“We are firm believers in the build-to-rent sector and the PRS tower at Hallsville Quarter underlines our ongoing commitment to deliver purpose-built, professionally-managed, and institutional-quality homes for communities in London.
“Our strong partnership with Grainger brings together expertise in development, design, construction, property and asset management to create a formidable team. We will not only meet the aspirations of Londoners looking for a better answer to their rental needs, but also continue to work alongside our partners at the London Borough of Newham to drive the economic growth of this important new focal point for the local community of Canning Town.”