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QIA, Delancey and APG in £1.4bn London resi merger

Deal ties East Village project in the Olympic site and the redevelopment of Elephant and Castle town centre in £1.4 billion ($2 billion; €1.8 billion) merger. The partnership seeks to become a significant investor in the UK private rented sector over the next few years.    

Qatari Diar Real Estate Investment, a subsidiary of the Qatar Investment Authority (QIA), London-based developer Delancey and Dutch pension fund APG are creating a £1.4 billion residential estate in London by merging the East Village project in the 2012 Olympic site and the redevelopment of Elephant and Castle town center, two prominent sites within London’s private rented sector. 

The merger, which is subject to regulatory approval, will create an equal partnership between Qatari Diar’s real estate investment arm, Delancey’s DV4 fund and Dutch pension fund asset manager APG.  

The deal includes a portfolio of 4,000 rented homes, located in the two sites. So far 1,500 of these have already been built, with the majority of those already let, a further 1,000 are under construction and the remaining 1,500 homes have planning consent with construction due to begin shortly. Qatari Diar and Delancey’s UK development company will work jointly on all the venture’s development activity.

All the homes will be managed and leased through Get Living London, the partnership’s existing management and letting platform.

Sheikh Jassim Al-Thani, Qatari Diar’s chief development officer, said: “This merger between two leading London private rented sector schemes is the first step in what is a much larger endeavor: to significantly increase the supply of new homes in connected and affordable locations in British cities. This ambition lies at the heart of Qatari Diar’s vision to create vibrant, sustainable local communities where people aspire to live, work and visit.”

The partnership, which has been working on the deal since 2010, said its ambition is to become the leading player in the delivery of professionally managed homes in London and other major UK cities over the next few years.

Jamie Ritblat, founder and chief executive, of Delancey, said: “From a blank sheet of paper in 2010, we have worked tirelessly alongside forward thinking global institutions in a number of separate strategies to build the foundations of a very significant enterprise for the long term.”

Robert-Jan Foortse, head of European property investments, APG, said: “In 2010 we started with our UK public retail sector investment strategy aimed at the strong supply – demand imbalance in the mid-market residential sector. This newly merged entity is the next milestone in our strategy.” 

Qatari Diar is owned by QIA, the sovereign wealth fund of the gulf state Qatar. One of its most recent deals was to team up with Toronto-based Brookfield Property Group to complete the acquisition of Canary Wharf’s owner, Songbird Estates for £2.6 billion (€3.5 billion; $4 billion) last April.

Through its funds, Delancey owns a diverse portfolio of residential, retail, office, logistics and corporate assets including 185 Park Street on London’s South Bank, private secondary school owners Alpha Plus Group and Here East, the digital and tech hub on the former Olympic site.

APG pension fund represents over 30 per cent of all pension schemes in the Netherlands, as well as managing pension assets of more than €409 billion.