BlackRock is making a big bet on the growth of retirement housing in the UK. This is the latest sign that institutional investors are being pushed into increasingly niche corners of the real estate market by seeking stable income.
Through its physical assets division, the world’s largest asset manager has invested £ 100m in a 75% stake in a 75% stake in a joint venture with retirement village developer Audrey Group.
“We have the advantage of being able to invest in any sector. Historically we have targeted offices, but nowadays we are more aggressive in the’bed’,” said BlackRock’s portfolio manager. One Thomas Müller said.
“We decided to focus on a more defensive and income-focused strategy during the pandemic,” he added. The company is considering private dormitories, rental housing, senior living, and logistics.
The investment will fund the development of about 1,000 homes, and companies estimate that when completed, it will be worth a total of around £ 500m. The first site of the joint venture is Watford’s 255 home development.
Nearly 100,000 people over the age of 65 are within a 20-minute drive from the site, Mueller said. He said more than 200 retirement homes have been built locally in the last five years.
Larger investors are betting on retirement homes in the UK due to the growing elderly population and limited supply of retirement homes compared to other developed countries such as the United States, Australia and New Zealand. I’m increasing.
Last year, Royal London made its first investment in this space in a joint venture with Audrey.
Legal and General launched its own “later life business” in 2017, called the Inspired Villages Group, and has since developed projects in towns such as Tunbridge Wells in Kent and Caddington in Bedfordshire.
In 2017, Axa Investment Management acquired its own developer called the Retirement Villages Group. Last year, an Axa-backed group announced that it would develop 30 new sites in towns and cities across the UK over the next decade.
Goldman Sachs is a key supporter of ReverseTone, a retirement developer with a £ 3bn pipeline, raising hundreds of millions of dollars to invest in this sector.
Boutique real estate investor FORE Partnership has also invested £ 300 million in this sector to partner with retirement homeowner Amicala to develop up to 1,000 homes.
Nick Sanderson, Chief Executive Officer of Audrey, said: “We have been one of the only operators in the field for 25 years and have been funded by private equity funds. What is happening now is market needs, demand and potential. It’s a recognition of scale. “
Separately, BlackRock Real Assets is funding the £ 362 million purchase of 3,000 co-owned homes by landlord Heylo Housing.
According to the company’s CEO, Andrew Getzi, interest from asset managers has helped Hailo win investment from other large corporations.
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