Moorfield Group has launched a new investment vehicle that will initially target newly-built and existing assets in the UK residential-for-rent market.
MREIT has already raised £100m of capital and is looking to raise more than £500m of investment capacity to fund the purchase of single-family homes and student houses of multiple occupation.
Moorfield said MREIT, which is aimed at institutional investors such as pension funds and insurers rather than retail investors, will look to take advantage of buy-to-let investors exiting the market early due to the combination of increased taxation, mortgage costs and regulation. It also sees opportunity in volume housebuilders looking to reduce their stock through bulk sales.
Charles Ferguson Davie (pictured), chief investment offficer at Moorfield Group, said: “We believe that MREIT’s acquisition strategy will offer an attractive exit option for buy-to-let investors looking to sell, as well as housebuilders that are increasingly considering bulk sales in the face of a weakening ‘for-sale’ market. We are targeting locations with strong underlying demand, identified for our core demographics – long-term renters and domestic students – but where new supply is limited to ensure that MREIT benefits from sustainable rental growth.
“The success of US single-family REITs demonstrate a way forward for institutional investment into UK residential-for-rent and we are confident that MREIT will help unlock this asset class, which has been difficult for institutions to access due to the granularity and fragmented ownership of existing stock.”
Marc Gilbard, chief executive officer at Moorfield Group, added: “Through MREIT, we are pleased to offer institutional investors another route to access a necessity-driven asset class with sustainable rental growth that has typically tracked inflation. UK residential has been one of our longest – and strongest – conviction themes, with demographic tailwinds and a stark demand-supply imbalance continuing to underpin values and support resilient rental growth over the long-term.”
