Merseyside Pension Fund and Strathclyde commit to DTZ Investors’ co-living fund
COLIV, an independent fund managed by DTZ Investors which is the world’s first fund established to provide institutions with the opportunity to invest in the London co-living sector, now has GBP170 million of capital to invest (assuming leverage), following a recently confirmed commitment from Merseyside Pension Fund, the Liverpool-based local authority pension fund.
Merseyside Pension Fund joins other investors in the Fund including the UK’s largest public pension fund, Strathclyde Pension Fund, which seeded the vehicle in October 2019. This commitment further underlines the appeal to institutional investors of large-scale purpose-built co-living as an asset class.
COLIV was launched in October last year with DTZI as the investment adviser and The Collective, the leading global co-living operator and developer, acting as asset and property manager.
The Fund is seeking to provide investors with an attractive core-plus return of 8-10 per cent pa, and intends to build a portfolio of best-in-class large-scale co-living assets in London over a four-year investment period.
Merseyside Pension Fund supports the Fund’s mission to deliver tangible social opportunities to the people it houses and the neighbourhoods where it invests. Its decision to proceed demonstrates that investment into the co-living sector has not been waylaid due to the Covid-19 pandemic.
The Collective’s long stay operating model has proven to be resilient over the past few months, highlighting the sector’s ability to comply with current social distancing guidelines and the relevance of the asset class’ focus on community, which has become even more important to its members during this period of social isolation.
With a focus on the London market, COLIV helps address the capital’s housing shortage by increasing the supply of an innovative residential asset class. Alongside the focus on social impact, a heavy emphasis is placed on positive environmental initiatives with the potential to drive down carbon emissions through the delivery of a sharing economy housing model in central and highly accessible locations, and the opportunity to increase the delivery and diversity of homes across London.
Kate Fearnley, Head of Investor Relations for COLIV at DTZ Investors, says: “The team at Merseyside shares our view, and that of The Collective, that it is incumbent on real estate investors and managers to have a positive impact on society whilst striving to achieve a strong risk-adjusted return. A further like-minded investor onboard will galvanise the Fund’s efforts to provide a housing solution that responds to renters’ demands for convenient accommodation and society’s need for buildings and places that bring communities together. I am delighted to welcome Merseyside Pension Fund as an investor into COLIV and look forward to working with them as we go forward with the Fund’s investment strategy.”