PineBridge Benson Elliot sees growing lender support for UK SFR

The manager received a £300m facility to acquire 34 sites from a mix of banks and alternatives.

Lenders are increasing their appetites for UK single-family-rental as the asset class continues to grow its institutional backing, according to London-based investment management firm PineBridge Benson Elliot.

Speaking to Real Estate Capital Europe, Luca Scollo, senior vice-president at PineBridge, said the asset class has been growing in its appeal to institutional investors because of the amount of old stock coupled with the undersupply of new buildings.

Last week, PineBridge received a £300 million (€346 million) facility from a mix of banks and alternative lenders to finance its acquisition of 34 sites – totalling 2,600 units – as part of its UK single-family rental aggregation strategy, targeting in excess of 5,000 units, through its subsidiary Sigma Capital Group.

“The United States boasts a mature build-to-rent market, featuring the largest institutional sector for rental houses, specifically single-family rentals,” Scollo said.

“The difference in the UK is that the majority of properties are owned by small-scale landlords, and often require refurbishment, with less than 15 percent of rental homes in England constructed within the last two decades. This is against a backdrop of ongoing low delivery rates of new housing, alongside secular demand for single family rented homes, bolstering the need for the high-quality properties,” he added.

On 27 September, real estate consultant JLL, in its European Multifamily Market Dynamics Report, highlighted that the UK is one of the markets in Europe posting positive year-on-year growth figures, where investment in the residential sector grew by 12 percent year-on-year due to the rise of transactions for single-family rental assets.

Another manager targeting investment in the sector is UK-focused real estate investment manager Moorfield Group. This week, the company launched MREIT, with the aim of acquiring existing and newly-built homes within two residential-for-rent sub-sectors: single-family homes and student houses of multiple occupation. The manager aims to invest upwards £500 million in the sector.

Another notable transaction includes Citra Living’s forward purchase of a 604-home UK portfolio from developer Barratt Developments for €194 million in June. Citra is the BTR arm of UK bank Lloyds Banking Group.