City investors pump millions into regional Build To Rent scheme

A Build To Rent scheme has been handed a huge cash boost from City investors.

Investec Real Estate has given Edmond de Rothschild Real Estate Investment Management a £19.3m development loan to support its construction of a 357-unit scheme in Rugby, which is set to fully open in January 2023.

Charolais Gardens is described as having “a mix of high-quality one- and two-bedroom apartments in a town centre location” and will include a concierge, gym, residents’ lounge and wellness garden.

The loan is Investec’s first with Edmond de Rothschild, which has made the investment through its Residential Investment Fund UK that focuses on the development of affordable BTR assets in UK regional cities.

Last year saw a record £3.1 billion invested in regional Build To Rent, with 20,000 homes under construction and a further 30,000 with planning approval. 

The sector says it has performed strongly against the challenging macroeconomic backdrop, with operators reporting strong lettings activity and challenges around affordability in the housing market, and changes in the way people are choosing to live, underpinning ongoing demand.

Jonathan Long, head of corporate real estate at Investec, comments: “This transaction demonstrates our conviction in high quality, affordably priced Build to Rent schemes that benefit from excellent transport connectivity. The government’s Levelling Up agenda, impact of the Covid-19 pandemic and the sector’s defensive characteristics have seen accelerated investment in, and demand for, rental homes outside of London. 

“Establishing new relationships with high quality counterparties such as Edmond de Rothschild is a key part of our growth strategy and we look forward building a long-term partnership.”

And James Whidborne, head of fund management residential UK at Edmond de Rothschild, adds: “This transaction is further evidence of the appetite for regional Build to Rent from a variety of both equity and debt providers. As a house, affordable UK residential is one of our strongest convictions. We hope this is the start of a strong relationship with Investec as we continue to grow our platform and create and launch a series of products investing in this space.”