Apache bets big on UK PRS with £1bn platform

The London and Gulf-based private real estate investment management firm has formed a joint venture with developer and operator Moda Living to develop a UK PRS portfolio.

Apache Capital Partners, the London and Gulf-based private real estate investment management firm, is set to create a UK private rental sector (PRS) portfolio valued at £1 billion (€1.38 billion; $1.58 billion).

The firm has formed a joint venture with UK PRS specialist developer and operator Moda Living to create purpose-built, rentable property. The pair currently have a pipeline of approximately 5,000 units across the UK.

The portfolio will be concentrated on regional centres where there is population growth and an undersupply of residential accommodation.

The seed asset of the portfolio is the Angel Gardens development in Manchester which includes a 36-story tower, comprising 458 units, gardens and resident amenities. Angel Gardens residents will have exclusive use of all amenities within the building, including resident lounges, a cinema room and business meeting space.

“At Apache Capital, we have seen a strong demand from our Middle Eastern investors in the UK’s Private Rented Sector. This is partly because PRS is already an established sector in the region, the sector’s continuing supply/demand imbalance in the UK, but also coupled with the prevailing lifestyle shift toward flexible living that delivers high quality amenities and services, commented Richard Jackson, co-founder and managing director of Apache.

“The 5,000 unit secured portfolio provides us immediate scale and Apache Capital and Moda Living will currently be the largest owner of regional purpose-built PRS and the second largest owner overall in the UK.”

Apache is the latest in a growing list of internationally-capitalized private real estate investment manager to make a move into UK PRS. Last week, for another example, Patrizia Immobilien, the German-based real estate investment company, made its first foray into the sector with the acquisition of the First Street site in Manchester which will spark the launch of the firm’s first dedicated PRS fund.

Patrizia acquired a partially-developed site, which includes a 180,000 square foot office building, capacity for the development of up to 1 million square feet of office space and approximately 500 new apartments. A source close to the transaction said the development is expected to be valued at approximately £500 million once it is completed.

Back in February, Legal & General Capital, the principal investment division of UK insurer Legal & General, also kick-started its £1 billion program of investments in UK PRS with the acquisition of a regeneration site in Walthamstow in east London for £25 million.