Places for People has entered into a £330m joint venture with Universities Superannuation Scheme (USS) to acquire a range of private rented residential assets.
Under the deal, the partnership will acquire a seed portfolio of assets from Places for People for around £150m. The seed portfolio includes a range of modern, mid-market properties, with a high occupancy rate with a risk based approach to geographical spread.
The funding will be used to acquire further PRS assets across the UK. These will be sourced from a combination of guaranteed offtake from Places for People’s in-house c. 15,000 home development programme, third-party acquisitions from UK housebuilders and developers, and acquisitions of high-quality existing PRS portfolios.
USS, the principal pension scheme for universities and other higher education institutions in the UK, will provide the core funding for the partnership, with Places for People taking a 10% stake in the partnership. PfP Capital will act as asset manager and Touchstone, Places for People’s specialist property management business will manage the portfolio on a day-to-day basis.
David Cowans, group chief executive of Places for People, said: “This new partnership bolsters our fund management business, which we launched last year to provide the group with a new revenue stream to help accelerate the delivery of new homes and attract wider investment into the sector.
“Since then, PfP Capital has demonstrated its credibility in the market. Its highly experienced and skilled team has helped to secure this agreement and will ensure that USS achieves a regular rental income and long-term capital growth.”
USS’s investment into PRS further complements its strategy of acquiring properties that can generate long-term stable returns, as demonstrated by its acquisitions of the PINE unit trust portfolio of nurseries and continued investment within the Supported Housing Investment Limited Partnership.
Alex Turner, deputy head of property at USS, added: “USS is committed to investing in real estate assets of long-term value, providing a secure income with significant potential for growth.
“This new partnership establishes our foothold in the PRS sector, which has experienced strong growth in recent years with a bright long-term outlook. Our relationship with PfP Capital and their knowledge of the sector will enable the partnership to identify well-priced assets across the country.”