A fund manager has announced a plan to invest £500mn in the UK rental market.
Moorfield Group has launched an investment trust, MREIT, to buy up homes initially in the rental sector as well as single family homes and houses of multiple occupation (HMOs).
So far, the trust has raised £100mn of capital and is targeting more than £500mn of investment capacity, aimed at institutional investors such as pension funds and insurers.
Charles Ferguson Davie, chief investment officer at Moorfield, said it should provide an “attractive exit opportunity” for landlords looking to sell up as well as housebuilders considering bulk sales.
He said: “We are targeting locations with strong underlying demand, identified for our core demographics – long-term renters and domestic students – but where new supply is limited to ensure that MREIT benefits from sustainable rental growth.
“The success of US single-family REITs demonstrate a way forward for institutional investment into UK residential-for-rent and we are confident that MREIT will help unlock this asset class, which has been difficult for institutions to access due to the granularity and fragmented ownership of existing stock.”
Nearly half-a-million landlords are expected to sell their rental homes in the next five years according to property consultants Hamptons International, after 140,000 left the market last year.
Marc Gilbard, CEO at Moorfield Group, said: “UK residential has been one of our longest – and strongest – conviction themes, with demographic tailwinds and a stark demand-supply imbalance continuing to underpin values and support resilient rental growth over the long-term.”
tara.o'connor@ft.com
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