PGIM Real Estate makes first acquisition for UK Affordable Housing Fund

PGIM Real Estate has made the first acquisition for its recently launched UK Affordable Housing Fund – a portfolio of eight single-family for-rent residential housing sites acquired from build-to-rent provider, Wise Living. 

PGIM Real Estate is the real estate investment business of PGIM, the USD1.5 trillion global investment management businesses of Prudential Financial, Inc.
Located in seven cities and towns across the Midlands and the North of England, the portfolio comprises of five stabilised assets and three development sites covering 314,000 sq ft. These sites will deliver a total of 433 units comprising predominantly of two and three-bed homes. In addition to good access to road, rail and bus transport, all eight locations are in close proximity to local employers, schools, supermarkets and other key amenities and leisure offerings. PGIM Real Estate acquired the portfolio direct from Wise Living, with whom they shall continue to work with closely going forward, in order to source new opportunities together. Wise Living will also continue to manage the stabilised properties and the developments once they are complete.
Unveiled in February, PGIM Real Estate’s UK Affordable Housing Fund invests in and develops single family homes with a focus on rents that are affordable for working people and families across the UK. It raised GBP190 million of initial capital from the Northern LGPS and Brunel Pension Partnership. The Fund is managed by an experienced team of investment professionals including senior portfolio manager, Paul Dennis-Jones and head of UK transactions, Charles Crowe.
Outside Central London, residential rental growth across the UK has remained robust over the past year, despite the sharp drop in household income growth as a result of the Covid-19 pandemic. With residential rents likely to track the rebound in household income growth in the years ahead, the UK residential property market is poised to deliver solid long-term income-driven returns for investors.
Charles Crowe says: “We are delighted to make our first investment for the strategy, and to work with the experienced team at Wise Living. At PGIM Real Estate, we have a strong track record in affordable housing, making our first investment in the UK back in 2016. Our recently launched strategy aims to alleviate the major supply/demand imbalance within UK affordable housing, benefitting working people and families, as well as income-focused investors. Despite recent economic uncertainty as a result of Covid-19, suburban areas and smaller towns with a greater emphasis on housing over apartments are reporting much stronger rental growth than city centre markets.”
Andy Deller, chief executive officer at Wise Living comments: “This is a significant transaction and marks the beginning of our new collaboration with PGIM Real Estate. We will be working together to secure further sites for it to invest in over the coming months and years. It’s an exciting project that will be a key part of our ongoing strategy to deliver rental homes to undersupplied suburban areas in the UK. The partnership is underpinned by the fact that we share the same values and view of the private-rental-sector and will enable both businesses to push forward with plans to help meet the growing demand from UK families for quality rental homes.”
PGIM Real Estate is also a member of the British Property Federation’s Affordable Housing Committee, which was launched today. PGIM Real Estate will work alongside Committee members to provide leadership for the real estate industry and its delivery of high-quality affordable housing across the UK – including shared ownership, affordable and social rent accommodation, and new homes in partnership with government bodies and housing associations.