London-based fund manager Internos Global Investors has joined forces with ‘community interest’ company, Catalyst for Homes (C4H), to invest in residential property in the UK.
The pair are currently reviewing 152 residential development sites across Greater London with a view to finding sites that are likely to provide a range of characteristics including asset management potential and up to 30-year income returns which are attractive to investors allocating from not only real estate, but also infrastructure and fixed income quotas
“This alliance with C4H demonstrates our commitment to the residential market, being the third significant Internos offering in this area, and the fifth so far for us in the wider residential sector in Europe,” said Steve Faber, head of UK markets for Internos, in a statement.
Andrew Taylor, UK residential investment at Internos, commented that the UK residential property market was ripe for institutional cash as, according to recent research, the its private rented sector is worth around £837 billion (€1.12 billion; $1.26 billion), of which only £18 billion is currently in the hands of institutional investors. The vast majority is held by private amateur landlords. This is a drop in the ocean compared to UK commercial property where more than 56 percent of the £647 billion marketplace is owned and managed by institutions.
“This disparity provides a significant opportunity to grow institutional investment with professional management in this previously overlooked market. Couple this with a worrying outlook for global equity and fixed income returns and the UK residential market provides an attractive proposition for risk-averse/return hungry investors,” said Taylor.
London-based Internos, founded by sector veterans Andrew Thornton and Jos Short, set itself the target of more UK residential acquisitions in 2015 in an announcement on its future strategy earlier this month. It also told PERE that it intended to undertake up to €250 million of investments in UK housing marketplace during the year. The firm nailed its colors to the mast with the announcement as it said it would complete up to €750 million of investments during the year across a range of strategies and markets in Europe.