Barings enters UK PRS market with Liverpool acquisition
Barings Real Estate has entered the UK private rented sector (PRS) with the acquisition of a 240 unit multifamily property, The Keel, at Queens Dock in Liverpool, for GBP46.75 million, from Moorfield Group (Moorfield).
The acquisition also includes an adjacent plot of land which is fully consented for PRS development. The investment has been made as part of Barings’ pan-European core investment strategy on behalf of institutional investors.
The Keel, a Liverpool landmark, is comprised of 240 apartments (425 beds) across 170,500 sq ft arranged over ground and four floors. Formerly Her Majesty’s Revenue and Customs’ (HMRC) Liverpool office, The Keel was recently converted to high quality mid-market residential apartments. The Keel is attractively positioned on the edge of River Mersey, with residents benefitting from water views, as well as a range of amenities including a manned concierge/reception, on-site gym, 207 car parking spaces and secure perimeter fencing.
The PRS market is rapidly emerging as an institutional asset class in the U.K. and is underpinned by key demographic and structural drivers including a chronic undersupply of housing, which is further exacerbated by declining average household sizes, as well as a significant increase in the number of people renting.
Darren Hutchinson, Managing Director – Head of U.K. Real Estate Transactions at Barings, says: “This transaction presents a rare opportunity to acquire a well located operating PRS asset in an iconic building on Liverpool’s riverside. We believe there is an opportunity to add value through leasing up the vacant apartments and capturing rental reversion as a number of short term leases in The Keel expire. Barings believes the UK PRS sector, and the regional mid-market sector in particular, is at the beginning of a period of sustained growth. We have extensive experience managing and investing in multifamily properties in the US and our acquisition of the Keel is a great start to our strong ambitions to expand that expertise to the UK.”
Charles Ferguson-Davie, Chief Investment Officer, Moorfield, says: “The Keel was one of the first PRS/BTR projects delivered in the UK and we are proud to have been at the forefront of this new and emerging sector. We will now be looking to identify new opportunities on behalf of our new fund, which achieved a first close in October 2017. This is targeting further investments in PRS/BTR, student accommodation, logistics, mixed-use projects and infrastructure-led opportunities. Moorfield has also invested three other BTR projects – two in Manchester known as The Trilogy and Duet, and one in Newcastle known as The Forge.”
Property Company Glenbrook will continue their association with The Keel following their original role as scheme developer. Glenbrook introduced the scheme to Barings and will partner with them on the asset management of The Keel and the development of the remaining consented land which, when delivered, will see the size of the scheme increase to more than 500 apartments.