Invesco Real Estate (IRE) has announced the launch and first close of its dedicated, open-ended UK Private Rented Sector (PRS) fund with approximately £250m (€328.7m) of investable capital, including debt, from five institutional investors in Australia, Canada and the UK. There are further closings planned over the next 12 months.
Capitalising on its wealth of investment experience, IRE have invested approximately $16bn (€14.7bn) over more than 30 years. The new UK PRS fund is intended to respond to the clear opportunity created by Britain’s growing imbalance in residential supply and demand. It aims to build on the successful track record of IRE’s multi-family investments across the US and Asia, as well as the firm’s initial European residential investments in the UK and Germany in the past 18 months, including a development in Hayes, scheduled for completion in May 2016.
IRE’s PRS investment approach focuses on large scale, high quality opportunities in recognised locations, within proven letting markets. IRE has an identified pipeline and is working to finalise its investment in a number of opportunities in the South East over the next few months.
John German, IRE’s senior director of residential investment, responsible for spearheading the firm’s European residential expertise commented: “The PRS or ‘multi-family’ sector is an established and well-understood asset class in parts of Europe and North America/Canada, so we are particularly pleased to have attracted experienced investors from these regions to our UK PRS fund.
“They share our assessment of the attractive properties of this growing sector in the UK, including its low correlation with commercial real estate, equities and gilts; its long-term return profile; the relative stability of income the sector may offer and the potential diversification benefits it can provide as part of a mixed-use portfolio.”
Simon Redman, managing director – client portfolio management: “With under 5% of the UK PRS owned by institutional investors in the UK (compared to over 25% in the US, for example) research by Invesco Real Estate earlier this year suggests that UK institutional investors are significantly underinvested in this fast growing and highest performing real estate asset class in the UK. The new fund seeks to respond to the clear opportunity by utilising IRE’s 30-year experience as one of the world’s largest and most experienced investors in the residential sector and applying it to the UK.”
