One of the largest PRS transactions ever completed outside of London
Vista Fund (the “Fund”), the residential property fund established by Countrywide plc (“Countrywide”), the UK’s largest property services group, and Hermes Investment Management (“Hermes”), the £29.8 billion investment manager, has entered into an agreement to acquire Baltic Village in Liverpool for over £50 million.
The development, which includes 324 apartments (214,000 sqft) and 6,100 sqft of retail space, was forward purchased from Merseyside’s leading property developer Promenade Estates, in one of the largest PRS transactions ever completed outside of London.
Baltic Village, which represents the Fund’s first large scale investment, will comprise 324 one, two and three bedroom apartments across three blocks, as well as 358 car park spaces. It also includes 11,000 sqft of tenant amenity space - providing concierge facilities, meeting rooms, a café and social area. Balfour Beatty has been contracted to build the scheme, which is due to complete in summer 2016.
Baltic Village will offer tenants the flexibility of renting in a professionally managed development and a high level of service.
The Vista Fund was established as a joint venture between Countrywide and Hermes Investment Management in October 2014. It combines the complementary skill sets of the UK’s largest property services group, including the largest letting and property management agency, with those of a recognised industry leader with an innovative and long term approach to responsible property investment - creating the pre-eminent residential property investment fund in the UK’s private residential sector.
The Vista Fund invests in existing residential assets and also forward commits to acquire new developments throughout the UK, providing institutional investors with exposure to real estate opportunities that offer potentially compelling net yield combined with long term capital growth, as well as complementing existing real estate and credit assets.
Located in the Baltic Triangle area of Liverpool, opposite the historic and popular Albert Docks, Baltic Village is approximately a five minute walk from the Echo Arena, BT Convention Centre, Liverpool One and the city’s Ropewalks district. Regarded as one of the UK’s most dynamic regional and economic centres, and home to multinationals including Barclays Wealth, Sony and Jaguar Land Rover, Liverpool has a growing population and business confidence in the city is on the increase.
Graham Bell, Managing Director at Countrywide said: “This is a significant transaction for the Vista Fund and reflects the ambition we have as part of our joint venture with Hermes Investment Management to use our combined expertise to build a portfolio of attractive, institutional grade residential properties across the regions in the UK. We view Liverpool as a strong investment proposition and we very much see similar regional investments as the future of the private residential sector in the UK.”
Chris Taylor, Chief Executive of Hermes Real Estate and Head of Private Markets at Hermes Investment Management said: “This deal demonstrates how the unique combination of our and Countrywide’s skills sets enables us to hit the ground running with the Fund and make strong investments. Baltic Village is a solid long-term investment in line with our strategy of focusing on high-quality, purpose-built residential stock across the UK, creating purpose built accessible housing to rent in city centre locations which benefit from improving public realm, infrastructure, heritage, retail and cultural facilities.
“We firmly believe that this approach will increasingly meet the demand arising from the long term urbanisation and demographic lifestyle trends which we are witnessing.
“The Baltic Triangle is part of a city that has seen tremendous growth over the past few years and we are excited to see what more the development can bring to the local area. We will deliver a rounded project, which will showcase impressive residential and mixed-use space that local residents will reap the benefits from.”
Peter Hynd, Chairman at Promenade Estates said: “The Baltic Village scheme, the first purpose built PRS scheme in Merseyside, represents the positive impact PRS can bring to the housing market through enhancing renting opportunities for young professionals in cities. It has been refreshing to work alongside Countrywide and Hermes to agree the sale of the scheme and see the confidence placed in Liverpool’s ability to be at the forefront of such a large-scale investment in a quality product.”
Vista, which has a target investor-level return of 9-10%, currently has a £200million pipeline and has a target growth of £1billion over the next five years, with medium term expansion targets of between £250million and £400million a year.
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