8 minute read
SPECIALIST HOUSING
Apache Capital launched Present Made, a concept for vertically integrated single-family housing for rent
Design and image Jo Cowen Architects
Bedding into Europe
With demand for senior living, healthcare, student housing and multifamily housing set to grow in Europe’s big fi ve markets, investors are increasingly drawn to specialist living opportunities, writes Mark Faithfull
MULTIFAMILY, student and senior living was once somewhat scoffed at under the catch-all ‘alternatives’ label, while the grown-up money headed for retail, offices and industrial property. But many investors are now increasing their focus on specialist living or dipping a toe into the sector for the first time. Research by Savills anticipates increased demand for purpose-built student housing, co-living and multifamily in ‘youthful’ cities (those with the largest share of people aged between 20-39), as well as senior housing and housing with care in ‘aged’ cities (those with the highest number
of 65-plus residents). By 2026, the UK will have the largest number of youthful cities in Europe (22), followed by Germany (18) and France (14). Germany will be the country with the most aged cities (25), followed by France (15) and Italy (14). Enticed by the opportunities presented by such demographic changes and the increasing urbanisation of populations, investors are increasing their exposure to specialist residential portfolios. M&G Investments has launched the M&G Shared Ownership Fund in a long-term strategic partnership with UK housing association The Hyde Group, to deliver €580m of affordable homes. The fund has launched with €250m of investment from Cambridgeshire and Northamptonshire local government pension schemes, Homes England and two M&G client funds, alongside Hyde. This will enable M&G to buy existing stock and fund much of Hyde’s development pipeline. The first stage is the €71m acquisition of 422 homes from Hyde in London and Kent, which will remain in the regulated social-housing sector and continue to be managed by Hyde.
Meanwhile, the Hines European Value Fund 2 has entered Italy’s residential market with the acquisition and regeneration of a €120m, 40,000 sq m portfolio in Milan. The move is Hines’ latest investment in the living sector in Milan, where it plans to deliver more than 5,000 new homes for rent by 2025. Also in Italy, France-based care-services group Korian has acquired 90% of the Santa Croce family group to boost its medical and healthcare portfolio in the Pied-
Seetor Living in Nuremberg-Mogeldorf
mont region around Turin. The platform includes five facilities with a total of 550 beds distributed between a 143-bed post-acute and rehabilitation clinic, and four long-stay care facilities, offering a total of 412 beds and day-care services. Moreover, Federico Guidoni, Korian’s executive vice-president, Italy, predicts that a pipeline of 270 beds should come on line by 2023. In Germany, Commerz Real has acquired the Seetor Living residential complex from developer GBI for its hausInvest open-ended real estate fund. The scheme, which consists of 97 residential units, is currently under construction in Nuremberg-Mogeldorf. With a total leasable area of approximately 6,000 sq m over six floors, it is part of the 20,000 sq m Seetor City Campus quarter, which encompasses additional apartment, office and hotel buildings. Maja Procz, global head of transactions at Commerz Real, says the purchase “ideally suits our fund strategy with its orientation to social sustainability”. Capital Bay Group recently completed its first successful acquisition in the assisted-living sector for SPA Living+ Europe, in conjunction with a mandate for the Swiss Prime Investment Foundation. The acquisition comprises five senior-living and nursing-care properties in Germany with a total of 254 apartments and 204 nursing beds, and a total rental area of around 28,150 sq m. SPA Living+ Europe is focused on investing in the European senior-living sector, but has plans to diversify into student housing, serviced apartments and micro living. The group has a target volume of more than €1bn.
Asian and Australasian investors have also been attracted to Europe, notably UK cities. Australia’s Macquarie Asset Management has established Goodstone Living to focus on the UK’s multifamily sector. The new business is headed by Darryl Flay and Martin Bellinger, who founded Essential Living, the UK’s first private developer-operator of purpose-built rental housing. Goodstone Living will focus on urban locations, according to Dana Gibson, co-head of Macquarie Asset Management’s real estate team in Europe. “This sector has emerged as a global mega-trend over the last 10 years,” he says. “This has created an opportunity to access this growing asset class at scale, and we expect sustained demand and changing demographics will make it more resilient, less volatile and correlated with inflation rather than the cycle.”
Meanwhile, Singapore’s sovereign wealth fund GIC has bought two student-housing properties in London for €400m from Unite Students, the UK’s largest provider of purpose-built student accommodation, for its 50:50 joint venture with Unite. The vehicle adds to a string of investments by Singaporean government-linked entities for UK student housing. Indeed, GIC previously partnered with Dubai-based Global Student Accommodation Group to buy a portfolio of UK student housing projects from Oaktree Capital Management.
Apache Capital has launched Present Made, billed as the UK’s first “vertically integrated, single-family housing for rent” platform. Present Made will develop, own and operate more than 3,000 homes in its first phase, with a focus on suburban locations across southern England. The first three sites in the company’s €1.9bn pipeline are in the Oxford-Cambridge Arc. This is Apache Capital’s second venture
into UK residential platforms after its €2.3bn multifamily joint venture with Moda Living, which is delivering upwards of 6,000 apartments for rent in the UK’s largest cities. Richard Jackson, managing director and co-founder of Apache Capital and CEO of Present Made, says: “Despite record numbers of families renting, no purpose-built single-family rental housing exists in the UK. Present Made will cater to this growing but under-served segment of the rental market.”
Traditional real estate firms are also getting in on the act. British Land’s 12,600 sq m mixed-use development in Aldgate, London will be residential-led, with 159 premium rental homes alongside offices, retail and leisure. In addition, British Land will build between 2,000 and 4,000 homes as part of the flexible planning consent secured at its Canada Water campus in southeast London. Meanwhile, Landsec’s move into rented residential will come as part of its redevelopment of the O2 shopping centre in Finchley, London. The scheme will deliver around 1,900 new homes, 35% of which come under the category of affordable housing, as well as shops and leisure facilities, a park, a community centre and a health centre. Shopping centre REIT Hammerson is also redeveloping some of its retail sites into rental homes, starting with its Highcross scheme in Leicester, while retailer John Lewis has announced plans to build 10,000 residential units for rent on some of its land. Invesco Real Estate has launched the Invesco Real Estate European Living open-ended fund for European residential assets across Europe, including multifamily, micro-apartments, student residences and individual houses. With initial capital of around €140m, funded by three German institutional investors, Invesco is targeting an initial portfolio of €500m over the next two
Homes England and Urban Splash are developing Grappenhall Woods in Warrington
to three years, with plans totalling €110m for its first operations in Italy and France. Invesco has increased its exposure to the residential sector over the past five years and, by the end of H2 2020, managed €2.3bn across 38 investments in Europe. Invesco senior fund management director William Ertz says: “The outlook is positive for urban areas surrounding main agglomerations, since there is insufficient supply in the main cities and long-term imbalances between housing supply and demand.”
The growing investor appetite for residential is driving innovatoin in the sector. For instance Nexity is responding to the challenges of the aging population by introducing what it calls ‘intergenerational housing.’ It has formed a partnership with senior housing specialiost Alogia Group to launch a platform called Complicity which will develop multigenerational residences for young people, families and seniors wishing to live in their own autonomous space, while at the same time benefiting from a range of services and shared spaces. The aim is to create an environment that will encourage better ways of living together and fostering social diversity. And modern methods of construction (MMC) are also seeing increased take-up as investors seek higher quality and faster delivery in the housing market. For example Homes England has appointed House by Urban Splash to create 228 new homes at the Grappenhall Woods site in Warrington, north-west England. House by Urban Splash first formed its partnership with Homes England and the world’s biggest Housebuilder Sekisui House in a £90m deal in 2019; it has since been appointed on new sites across the UK. All of the factory built homes in the company’s portfolio are created using MMC to customer specifications; modules are constructed in the company’s own factory in the East Midlands before being transported to site. Urban Splash group director Nathan Cornish concludes: “The approach greatly reduces build time and is a more sustainable solution to housebuilding.” n
RESIDENTIAL
17.15 > 18.15 | Workshop Room - Palais 3
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CONFERENCES & EVENTS AT MIPIM
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Debate how the industry can build what people need, want and can afford – and not just meet housing targets – through innovative methods. A new fresh approach to our asset class sessions this year. There will be a special emphasis on networking face-to-face after such a long break from us being able to do so. This session will be a mix of opening keynotes followed by roundtable discussions to encourage much more networking inspired by content of most interest to you. Participants will be entering the room and choosing a table topic of their choice.
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Lukas WILLHOEFT
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MODERATOR Sofia KARADIMA
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