Moorfield Group, the UK real estate fund manager, and Bricklane, the proptech residential investment platform, have established a partnership that is targeting a £600 million UK portfolio of professionally-managed homes for rent. The partnership, which represents a significant technology-driven investment in the UK’s residential market to date, will focus on unlocking the institutional potential of existing stock, with the investments to be acquired and managed by Bricklane through Compass, its proprietary technology platform.
The partnership aims to acquire around 2,000 one to four bedroom houses and flats over the next 24 months with an initial focus on London, Bristol and the South East. Using Bricklane’s technology, the Partnership will target attractive sub-markets with deep granularity, using unique bottom-up data to acquire rental properties that are expected to outperform in those areas at an unprecedented scale. Once units are acquired, the Partnership will seek to grow income and capital values through active asset management and refurbishment, with the aim of delivering a professional, high quality proposition for tenants.
By focusing on existing properties, in particular the 98 per cent of the rental market owned by the UK’s 2.5 million buy-to-let landlords, the Partnership expects to deliver attractive risk-adjusted returns and provide superior service and quality of home to a wider range of tenants, while also avoiding the carbon-cost of demolition and construction. This Partnership sees the UK beginning to follow the example of the US single-family residential market, in which institutional investment in existing granular properties has scaled from near $0 to $40bn in ten years.
Both Moorfield and Bricklane bring a strong track record of investing in and operating residential property. Bricklane specialises in acquiring and managing granular residential for rent across the UK, with existing portfolios in London, Leeds, Manchester, and Birmingham. Moorfield, an early investor in the living sector, has a deep expertise in purpose-built student accommodation (Domain – since 1997), retirement living (Audley – since 2008) and Build To Rent (More. – since 2012). Moorfield also recently announced a partnership with We are Kin to focus on the one million bed HMO student accommodation market, with a number of portfolio and individual acquisitions already completed.
Ross Netherway, head of origination at Moorfield Group, said: “This Partnership provides us with an efficient and scalable means to find, buy, and manage individual residential properties for rent in our target markets. We are excited to be partnering with Bricklane who have the best-in-class capabilities—both human and technological—to help us deliver on our shared ambition. This Partnership will help further diversify our activities in our ‘beds’ theme and see us drive the professionalisation of a vast but fragmented market.”
Simon Heawood, CEO and co-founder of Bricklane, said: “The time is ripe for institutional capital to access and professionalise the mainstream Private Rented Sector. Demand is at an all-time high, while it is becoming less financially attractive for individual landlords to operate in the sector. Moreover, tenants are rightly demanding higher quality service and more secure contracts for their homes. Access to the mainstream market requires industrialising the acquisition and management of large numbers of individual assets, which is impossible without deep investment in technology. We have spent years building the technology platform, data science expertise and management experience to enable us to capitalise on this opportunity. We are very pleased to be doing this with a group of Moorfield’s track record and calibre, and the scale that this partnership brings will be transformational for our business, meaning that we are the leading platform of our kind in Europe. US operators have shown the potential of granular investment at scale and we believe that the UK’s population of renters deserves properties in which they can be truly at home.”
This post has originally been featured in Property Wire.