Huge local government pension fund investment goes to Build To Rent

One of the UK’s largest local government pension schemes has committed £100m to invest in the fast-growing Build To Rent sector.

The Northern Ireland Local Government Officers’ Superannuation Committee, which invests around £6.5 billion on behalf of its members, is putting £100m into M&G Real Estate’s UK residential property portfolio.

The deal is one of the biggest pension fund Build To Rent mandates to be awarded in the UK this year.

“NILGOSC has a significant allocation to UK property already and this further commitment to residential property is another exciting ingredient in the mix. We believe that M&G Real Estate’s fund is ideal for a long-term pension investor like ourselves and with their expertise we will benefit from steady and healthy returns” says a spokesman for the fund.

M&G Real Estate now invests in Build To Rent on behalf of 13 UK pension funds, including 10 UK local government pension schemes, and one foreign pension scheme. 

“Whilst foreign investors are used to investing into residential property UK schemes are increasingly aware of what residential can add to a portfolio – diversification relative to UK commercial property, favourable demand/supply dynamics, low downside volatility and growing income returns” explains M&G business development director Lucy Williams.

Since M&G’s involvement in the sector in 2013, it says it has invested in or financed the construction of some 2,000 homes, signed the first ever investor housebuilder framework agreement of its kind with Crest Nicholson and doubled the size of its Build To Rent team.