Grosvenor, the Duke of Westminster’s property business, is launching a billion pound lending business centered around residential development. The group, which owns significant numbers of properties in prime areas of London such as Mayfair and Belgravia, wants to broaden its reach and venture into different types of residential property across the UK, including rental, student and retirement housing. This includes both a Leeds build-to-rent scheme and a Leeds student scheme in an initial £46m of transactions.
The move to diversify away from London and into cities such as Birmingham, Leeds and Manchester has been very much a pattern repeated over the last couple of years by large property funds. They see these markets as less mature with huge scope for growth and attractive yields to service any debt.
This year has seen a number of very significant shows of confidence in the UK’s residential property market. USS the UK’s largest pension fund has just bought a portfolio worth around 400 million in one of the UK’s largest property deals, a significant proportion of those properties are in and around Birmingham. Additionally Blackstone the giant US private equity fund has paid housebuilder Vistry almost 600 million to buy up a portfolio of some 2000 homes.
With rates coming down and prices on an upward trajectory, the large institutions are wasting little time snapping up quality properties in the best strategic locations across the country.
