DHS Real Estate creates joint venture to create a GBP 1 billion investment portfolio
(PRUnderground) May 18th, 2021
DHS Real Estate launches joint venture to create a GBP 1 billion investment portfolio of 3,000 high-quality “build-to-rent” (“BTR”) residential homes at market rental rates in more affordable areas of Greater London
The joint venture constitutes DHS Real Estate’s first UK investment and combines its thematic focus on “beds and sheds” in European gateway cities with a social impact strategy underpinned by DHS’ industry-leading sustainability credentials.
The joint venture launches having secured five sites from one of the UK’s premier homebuilders, Countryside Properties, and has agreed to purchase two additional BTR sites from DHS upon their completion. Initial financing provided by Homes England, the housing agency of the UK Government
DHS Real Estate today announced the launch of a joint venture, a London-listed residential development and urban regeneration specialist. The JV will focus on the creation of new-build, high-quality well-located BTR residential apartment blocks and houses in more affordable parts of Greater London and its commuter towns. The homes will be predominantly located in transport Zones 3-6 and in close proximity to transport links, including train access to central London.
Completed homes will be let at market-rate rents under DHS’ ‘Simple Life London’ brand, which aims to bring a higher standard of customer care and convenience to the private rental market. DHS has pioneered BTR in the UK and to date has successfully delivered and manages in excess of 4,200 rental homes across the UK.
DHS Real Estate has initially committed equity of GBP 300 million and GBP 16 million, respectively, to the JV. Including gearing, it is intended that the JV will have an initial capacity to establish an investment portfolio of approximately 3,000 homes with a total value in excess of GBP 1 billion. The JV has secured five projects with an aggregate of 361 homes from Countryside Properties plc (“Countryside Properties”) located in the London boroughs of Ealing, Enfield and Havering. In addition, two further sites currently under development by DHS in the boroughs of Barking and Dagenham and Havering will be acquired by the JV on completion. These two sites together will comprise an additional 157 homes and are expected to be completed during H1 2021. The JV’s assets are expected to be delivered over a period of at least five years in order to create a stabilized portfolio of diversified rental income.
The initial acquisitions will be financed with a GBP 50 million loan facility from Homes England, the UK Government’s housing body that is responsible for increasing the number of new homes that are built in England and sponsored by the Ministry of Housing, Communities & Local Government. DHS Real Estate shares the same vision of delivering thousands of new rental homes in London where there is a critical undersupply of affordable, high-quality rental properties.
Consistent with other DHS Real Estate transactions, the JV will invest in buildings with strong sustainability credentials. Where possible, buildings will tap into local community heating networks and will utilize photovoltaic panels. The JV will also promote sustainable living practices within the apartments themselves, while the schemes will include ample cycle storage and will typically be located near green outdoor areas, an important wellness factor.
Fernando Aguirre, Executive Vice Chairman of DHS, said: “DHS Real Estate is thrilled to be entering the London residential market, one with a severe supply shortage of professionally managed, high-quality, good value homes to rent. In addition to the initial seven schemes, we are currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional BTR portfolio with robust and diversified rental income. DHS Real Estate looks forward to partnering with the team to realise our shared vision over the coming years.”
Rakesh Sarna, Chairman fo DHS, said: “This joint venture marks an exciting entrance into the UK for DHS Real Estate as it represents the first transaction in this market since the business line was established in 2018. I cannot think of a more compelling investment opportunity at the moment than to deploy capital into this high conviction strategy, and one that should deliver significant social impact, by providing market-rate housing to renters in affordable locations within Greater London and its commuter towns with strong transport links.”
Housing Minister Rt Hon Christopher Pincher MP said: “This Government is committed to delivering 300,000 new homes a year in England by the mid-2020s, ensuring everyone has the opportunity for a decent and secure place to call home.
“These 3,000 new homes, backed by £50 million from our housing accelerator Homes England, will help us deliver for families across Greater London.”
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For DHS Investors
This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially, including risks associated with transitions in key personnel and succession, products, their development, integration and distribution, product demand and pipeline, customer acceptance of new products, economic and competitive factors, DHS’ key strategic relationships, acquisition and related integration risks as well as other risks detailed in DHS’ filings with the Securities and Exchange Commission. DHS assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
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