In part one, we looked at the major institutional investors ploughing money into the rapidly growing Build to Rent (BTR) sector.
Here, we take a closer look at some of the developers making the biggest splash in this fast-emerging market – which in recent years has become probably the biggest rental property trend. Designed specifically for renters, BTR schemes – typically blocks of apartments found in town or city centres – aim to offer a better type of renting experience, with stylish interiors, free broadband, no agency fees and various add-ons.
Founded in the UK in 1992, Quintain floated on the London Stock Exchange in 1996 and was taken into private ownership in 2015 when US private equity group Lone Star bought the company for more than £700 million.
It owns large swathes of Wembley Park, which covers approximately 85 acres of land around Wembley Stadium in North West London. In recent years, as part of one of Europe’s largest regeneration projects, it has been creating shops, offices and homes there, as well as thousands of professionally-run rental apartments through its BTR brand Tipi.
Quintain currently has planning consent for a total of 8.8 million sq ft of development, including up to 8,500 homes. The first 3,000 new homes have already been completed, alongside hotels, Boxpark Wembley, Troubadour Wembley Park Theatre and London Designer Outlet, with the latter attracting around seven million visitors a year.
Tipi, which has previously used revolutionary-style branding and a big advertising push across London’s transport network, has quickly become one of the UK’s most recognisable rental brands and offers brand new studio, one, two and three-bed apartments co-designed with Samsung and John Lewis & Partners across a number of buildings.
Tipi launched in 2016 and it was announced in February 2017 that Wembley Park was set to become the largest BTR development site in the UK, with 5,000 homes delivered by 2024, all of them under the management of Tipi.
Has a number of schemes in London and its outskirts, including two in Croydon, one in Park Lane, one apiece in Sutton and Norbury, and developments in Bracknell and Basildon.
Its website says it has 3,247 flats in a committed development pipeline and a vision to build 15,000 flats for rental in London by 2030. This includes plans to construct nearly 5,000 BTR homes over the next five years.
Last year it bought the 370,000 sq ft Delta Point building in Croydon – a former BT office building, most recently famous for its starring role in the Batman film Dark Knight Rises – for conversion into BTR.
Moda Living and Apache Capital
This partnership – a strategic £1 billion joint venture to plan, develop, deliver and operate a leading premium BTR portfolio, located in prime sites across UK regional cities, with a pipeline of approximately 5,000 units – has been one of the most high-profile in recent times.
The partnership aims to create the largest owner of regional purpose-built BTR and one of the largest owners of BTR overall in the UK, and to this end it has schemes close to opening or coming soon in Manchester, Liverpool, York, Birmingham, Leeds, Edinburgh, Glasgow and Brighton & Hove.
The joint venture has received loans from Goldman Sachs and LaSalle Investment for its schemes in Birmingham and Leeds respectively, while Apache Capital has formed a separate JV with Harrison Street and NFU Mutual to fund the development of BTR schemes across England and Scotland.
None of its scheme are yet open – although the Manchester development, Angels Gardens, is set to open in August, and it has a large number of units in the construction or planning stages.
Instead of building large blocks of apartments that make up the vast majority of the BTR market, Sigma Capital tends to build and own single-family homes, very much targeting the lower end of the marketplace through its Simple Life brand.
It achieves this via both private vehicles and a REIT, the PRS REIT, it formed to own completed assets. Sigma has a target of 20,000 family homes for rent throughout England’s key regional cities over the next five years.
Most recently, it revealed it is developing 298 new apartments in Broughton Village, Salford, under the Simple Life brand, in partnership with Countryside. The £40 million project, marking Simple Life’s first foray into apartments in the area, is made up of a mix of one, two and three-bedroom units built across 4.7 acres of land.
This latest development expands Simple Life’s existing portfolio to over 2,000 properties across the country.
The American developer spotted the potential of Build to Rent in the UK early on, seeking to match the success of the multifamily sector in the US. It entered the European market in 2013 to acquire and develop purpose-built student accommodation and rental housing.
It has the goal of delivering 10,000 BTR units in London by 2022, and its UK development pipeline has already grown to more than 4,500 units. This includes the world’s tallest modular tower in Croydon, which is set to house 546 BTR apartments once operational.
Once the two tower scheme, a joint venture between Greystar and Henderson Park, is ready, Greystar will have large-scale rental housing developments in four parts of London – Greenford in West London, Sailmakers in East London, Nine Elms in Central London and Croydon in South London.
In June last year, European investment platform Henderson Park and Greystar also collaborated on the £101 million purchase of a site at the former Royal Mail depot in Nine Elms, South London. This joint venture is responsible for four schemes in London, and nearly 2,000 apartments.
Different from all the other major operators in the Build to Rent market by virtue of being a housing association, L&Q (or London & Quadrant to give the firm its full name) owns or operates more than 95,000 homes. Traditionally, it has been very much focused on social housing, but in recent years it has moved into the thriving private rented sector.
It has plans to build around 7,000 BTR homes, with 2,500 of those said to be already completed. This has included a £62 million tie-up with specialist residential developer HUB to develop 172 homes in Croydon, and collaborations with Sigma and Berkeley.
The company has, however, faced criticism over the level of service it offers to tenants at its developments.
The UK company, which has been investing in homes since 1912, is one of Britain’s largest professional landlords and has a pipeline of projects which now tops 9,000 homes. This included, most recently, the agreement to forward-fund and acquire a BTR development at Capital Quarter in Cardiff for £57 million.
Earlier this year, Grainger revealed its current BTR pipeline stands at 24 schemes and that it has completed or is in the process of constructing 9,104 homes ‘purpose-built for the private lettings market’.
It also revealed the four new BTR schemes that will be launched this year: Solstice Apartments in Milton Keynes; Millet Place at Pontoon Dock in London; Apex Gardens at Seven Sisters in London; and The Filaments in Greater Manchester.
These, along with Brook Place (Sheffield) which launched earlier this year, were set to see Grainger deliver over 1,000 new homes in 2020 – although it’s unclear if the coronavirus will affect this.
One of the biggest names in the BTR sector, Grainger – which has a tie-up with Transport for London – also has schemes in Salford, Aldershot and Bristol, with schemes coming soon in Birmingham and Leeds. The BTR giant also recently revealed that it has bucked the Covid-19 downturn with a large rise in rental income.
One of the earliest pioneers of the Build to Rent movement in the UK, Get Living became a well-known name for its involvement with the Athletes’ Village for the 2012 London Olympic Games. It subsequently turned this village into a residential scheme once the Games had completed.
Get Living, which is part-owned by Qatari Diar, APG and Delancey, aims ultimately to construct up to 12,000-14,000 homes.
Presently, it has around 3,000 homes, mostly across the two London schemes at East Village, as well as Elephant Central in Elephant & Castle, with a smaller scheme at Middlewood Locks in Manchester.
Its portfolio also features approximately 1,000 homes currently under construction and a secured development pipeline of 4,000 homes, located at East Village, Elephant & Castle and Middlewood Locks, as well as two sites in the key regional cities of Glasgow and Leeds.
It was recently revealed that a massive £250 million had been raised from a Swedish pension fund towards UK BTR projects. Property development firm Oxford Properties Group, along with Delancey, said their BTR investment vehicle called DOOR had raised the funds from Stockholm-based Alecta. DOOR is the investment vehicle which part-owns Get Living.
A statement issued to announce the investment said: “Get Living continues to target large-scale development sites across the UK that comprise 400 units or more once complete to create vibrant residential-led neighbourhoods, as well as stabilised assets, forward funding and corporate acquisitions.”
A wholly owned subsidiary of Thames Valley Housing, Fizzy has previously been described as the first company in the UK ‘designed specifically to service the needs of young professionals seeking accommodation in the PRS’.
It aims to ‘reinvent renting’ with a number of pet-friendly apartments, offering free WiFi, quality furnishings and reliable services, across London. It has schemes in Hayes, Walthamstow, Lewisham, Stepney Green, Canning Town, Poplar and Epsom.
Essential Living, Uncle and Folio are other examples of well-established BTR names, while there are many smaller operators seeking to grab a slice of this rapidly expanding market.
The third and final part of this series will focus on the rental management companies looking after the increasing number of Build to Rent units.
This post has originally been featured in Property Investor Today.