This activity is a further display of confidence in the resilience of the BTR market, even in the face of broader economic uncertainties and viability challenges. The currently multi-family (MF) development investment landscape continues to be characterised by a proactive approach from investors and developers to find an investment solution for development opportunities in a challenging environment. This is supplemented with an increasing but overall, a modest, number of operational assets coming to the market, particularly first-generation schemes.
Who is Active / Headline Deals
Recent BTR Multi Family transactions include Hines purchase of Solasta Riverside, Glasgow a 324 stabilised BTR scheme from L&G, the outlier. The Single Family market has been particularly active with Placefirst believed to be under exclusivity to purchase Project Oak for £225M, a 520 home stabilised SFH portfolio across eleven sites from Blackstone. Sigma Capital has purchased a portfolio of sites totalling 415 new homes for £100M from Vistry to add to their SFH stock. Lloyds Living has forward purchased 598 homes from Barratt Redrow across 11 regional locations comprising 398 homes. Long Harbour has acquired 105 homes from Vistry in Newhall, Essex. Kennedy Wilson has added more assets to their fast growing portfolio in Derby, Cheltenham and Milton Keynes.
Direction of Travel
SFH continues to see a number of high-profile entrants in recent months and we are seeing further capital looking to enter the space. Housebuilders continue to be attracted to the sector as a diversification alongside their sales business, creating partnerships, with SFH investors.
We continue to expect investors prioritising progressed, best quality MF assets with strong, experienced development partners. The recent Building Safety Regulations are causing further challenges to MF development, increasing programme length and costs.
Yields will be robust for best-in-class schemes, with secondary locations more challenging due to viability constraints.
