Agent has mandate to build 10,000-home UK portfolio for Swedish landlord, writes Alex Catalano
Akelius is Sweden’s largest private landlord; between Swedish and German holdings it has a £3bn portfolio.
“They want to diversify and they’re starting with their decision to invest in the UK,” says Andrew Pratt, residential investment consultant at CBRE, which has a mandate to build up a portfolio of 10,000 homes for Akelius over the next five years.
Unusually, Akelius is owned by a charitable foundation set up by its founder, Roger Akelius, a Swedish businessman who made his fortune in property and insurance “The strategy is to buy residential market let investments with established income flows; they won’t take development risk or forward fund developments, even with a triple A guarantee for rents over any period of time. So they are taking a very cautious approach initially,” says Pratt.
Akelius is targeting greater London and commuter towns with good transport links to the capital, which offer high potential rent and yield growth.
It is looking at existing stock in the £5m- £20m range that will produce 4-4.5% income returns, with a target return of 7.5%-plus. Akelius’ continental holdings are yielding a net 5.1% in Sweden and 4.9% in Germany.
Homes worth £90m in the bag
CBRE has already bought 670 homes worth £90m. Pratt expects to spend another £100m-150m this year and has just completed on a £75.3m package of 574 flats bought from Terrace Hill. The properties are spread across 26 sites in Akelius’ core areas of London and the south-east, in locations such as Clapham, Kennington, Ealing, Watford and Milton Keynes.
This deal was “slightly unusual”, notes Pratt. “They decided to exit from the assets they held and we bought them with a com-petitive bid. It’s a substantial investment. “It’s never easy because there’s always competition and certain assets don’t suit, but we’re confident that we can achieve the acquisitions within the strategy and pricing they’re looking for, within the time scale.” Work on refurbishing homes in the first acquisition has started. “We’ve achieved the targets in terms of the rent increases we were looking for,” says Pratt.