UK: Greystar has formed a strategic partnership with a wholly owned subsidiary of the Abu Dhabi Investment Authority of up to £2.2 billion to develop BTR housing in London and its surrounding commuter towns.
The partnership will develop new assets through ground-up development and is targeting a development pipeline of approximately £1.8 billion in total capitalisation and equity commitments of up to £750 million between the partners. Greystar agreed to purchase a 0.84-acre site subject to planning on Lombard Road in Battersea, London, for £31 million in June 2021 that will become the partnership’s first new seed asset.
Since 2015, Greystar and ADIA subsidiaries have also created a portfolio of more than 6,000 homes for students and young professionals in the Netherlands under the OurDomain brand.
In conjunction with the partnership, Greystar has acquired and will manage the Fizzy Living portfolio, which comprises nearly 1,000 homes, from Metropolitan Thames Valley Housing (MTVH). The acquisition has an implied portfolio valuation in the region of £400 million. The Fizzy Living brand and more than 30 employees will move across to Greystar.
The Fizzy Living assets are in Canning Town, Lewisham, Epsom, Stepney Green, Poplar, Walthamstow, Hayes and Silvertown. Greystar will implement “a proactive value-add strategy across the portfolio, including capital improvements and other operational enhancements”.
Mark Allnutt, senior managing director – Europe, Greystar, said: “Demographic trends and a severe structural undersupply of housing is driving demand for high quality rental homes in the UK, so this remains a high conviction investment strategy for Greystar. We have a highly successful relationship with ADIA in the Netherlands and now have a unique opportunity to create a rental housing portfolio of substantial scale in London and its surrounding commuter towns. The Fizzy transaction provides us with day one access to eight operational assets and a host of new team members that we are pleased to welcome to Greystar. In addition, we will grow the portfolio through our newly formed partnership with ADIA from the ground up.”
Salem Al Darmaki, deputy director of the Real Estate & Infrastructure Department at ADIA, said: “We believe strong long-term fundamentals are driving the demand for purpose-built rental housing in the London area. With the creation of this platform, our objective is to address this specific, growing market opportunity while expanding our relationship with a proven, world class partner in Greystar. This is consistent with our approach of investing in high conviction opportunities, at scale, to capture future growth trends.”
