Invesco secures GBP42m commitment from Lambeth Council for BTR strategy
Invesco has secured a GBP42 million investment by Lambeth Council into the Invesco Real Estate UK Build to Rent (BTR) strategy.
Lambeth Council joins a growing number of investors, including several Local Authorities and investors from Australia, Canada, Switzerland and The Netherlands in the strategy that now has in excess of GBP350 million.
IRE is one of the world’s largest and most experienced investors in the residential sector globally, having invested circa GBP14.8 billion over the past 30 years. Launched in 2014, the UK BTR strategy seeks to respond to the opportunity created by Britain’s growing imbalance in residential supply and demand, the cost of owner occupation and the growing trend for the flexibility of renting.
The strategy’s investment approach focuses on large scale, high quality opportunities in recognised locations, within proven letting markets. By having a strong reputation, experienced team and track record as well as working directly with contractors and developers, the strategy is able to source off-market opportunities, which IRE believes can be an important differentiator in the sector.
Through this strategy IRE has to date committed to 10 investments in the UK, with six in regional towns and cities (which include Exeter, Greater Manchester and Liverpool) and four in London and the South East. The strategy currently holds 1,700 units in total, including those under construction, for a total investment of circa GBP425 million.
Simon Redman, Managing Director – Global Head of Product Management, Invesco Real Estate says: “Lambeth 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.”
Andrien Meyers, Head of Treasury and Pensions – London Borough of Lambeth Pension Fund, says: “Following our investment strategy review the Lambeth Fund has set aside GBP42m for investment in UK PRS.
“The Invesco offering allows the Fund to complement its exposure to European Commercial property; whilst continuing to address its objectives of diversification and inflation protection. Further as the Fund is projected to be in negative cash-flow over the next six or so years, the need for income to pay benefits will be also be addressed. The offering is also future proofed with regards to the government’s pooling agenda. Finally the Lambeth Fund would like to think its playing a small part in addressing the Country’s housing crisis via its investment in this infrastructure type asset class – as there are currently projects within the pipeline that lay within the Borough of Lambeth.”
Alex Millar, Head of UK Institutional, Invesco, says: "Winning this mandate is a real testament to the depth and strength of Invesco’s offering and a further example of our ongoing commitment to the LGPS sector through the combined efforts of our Institutional sales and real estate teams. We believe UK PRS provides LGPS funds with a stable long duration income profile, diversification benefits as well as supporting a UK wide need for housing infrastructure.”