The Multifamily Housing REIT, a regional UK private rented sector (PRS) property group, is planning to compete against buy-to-let landlords in the private rental market by raising £175m to invest in the sector.
The closed-ended real estate investment trust, set up by Harwood Capital’s real estate arm, intends to raise the money by issuing shares at £1 each and joining the stock exchange later this month.
Nick Jopling, a non-executive chairman of The Multifamily Housing REIT, said: “The provision of, and access to, good quality and affordable privately rented accommodation has been lacking in the UK and it remains one the most undersupplied and fragmented, yet fastest growing, parts of the housing market.”
The PRS is starting to attract a greater level of institutional investment, with the likes of Legal & General and M&G primarily focused on Build to Rent developments. But The Multifamily Housing REIT is the first listed vehicle to focus exclusively on pre-built rental homes.
The Multifamily Housing REIT is planning to use just over £70m of the cash to buy an initial seed portfolio of 658 PRS homes and five commercial premises across 22 housing blocks, mostly in the north of England, the Midlands and the south-west.
Jonathan Whittingham, CEO of Harwood Real Estate Asset Management and non-executive director of The Multifamily Housing REIT, said: “This is a hugely exciting opportunity for investors, as we look to capitalise on the favourable supply-demand dynamics supporting investment into the PRS sector, an addressable market believed to be valued at over £900bn, and build out the UK’s first significant built stock platform to meet the demands of renters for genuinely affordable, well-located accommodation.
“With a significant pipeline of good-quality, high occupancy properties identified, we are well placed to deliver the 10% income focussed target return, as the first REIT to offer investor access to the existing PRS market on an institutional scale.”