Prupim Buys $158 Million Private Rented U.K. Homes From BerkeleyPatrick Gower
Prupim, the real estate unit of M&G Investments, agreed to buy a portfolio of rental homes in London and southeast England for 105.4 million pounds ($158 million) from Berkeley Group Holdings Plc.
The 534 properties are being built by Cobham, England-based Berkeley, the U.K.’s third-largest homebuilder, and the Homes and Communities Agency, Prupim said in an e-mailed statement today. The buyer will take over management after the completion of construction, expected in June.
“The expanding residential rental property market, particularly in London and southern England, is gaining appeal for institutional investors,” Prupim Chief Executive Officer Alex Jeffrey said in the statement. “We believe that returns from the sector -- which have historically outpaced commercial real estate -- will continue to be attractive as demand increases.”
The U.K. government increased funding for newly built rental homes to 1 billion pounds from 200 million pounds this month as it encourages institutional investors to become landlords. Efforts to boost the rental market come as a lack of mortgage lending and higher barriers for borrowers makes it necessary for more families to rent.
The homes being bought by London-based Prupim were developed under the government’s 2009 Private Rented Sector Initiative, which used HCA funding to start the development.
Property broker Savills Plc will handle the day-to-day management of the properties, Prupim said.