Cording Real Estate Group, the European real estate investment and asset management firm, has secured the first deal for its new £400 million Cording UK Residential Investment Fund, which invests in the private rented sector (PRS) on behalf of Continental European investors.
The fund has agreed to forward fund a build-to-rent development for around £50 million at the Merlin Works site in the Waterside regeneration area in Leicester.
The development has been assembled by the developer, CODE, and will be built by Winvic Construction in its second built-to-rent project with Cording. It comprises more than 380 one and two-bed apartments and was designed by Leicester-based architect, Staniforth.
Construction will commence on site in November and is expected to be completed in autumn 2020.
Charlie Miller, Director of Residential Acquisitions at Cording, said: “Leicester is a fantastic location for the fund’s first build-to-rent investment. It is a vibrant city which features prominently in the East Midlands with a high demand for affordable new build-to-rent accommodation in line with the fund’s strategy.
“Leicester’s population is forecast to grow at a rate in excess of the national average, while the current supply of rental stock in Leicester is limited and relatively dated.”
The Cording UK Residential Investment Fund was launched in August 2018 with equity commitments of more than £100 million from German institutional investors. Cording is expecting to raise an additional £150 million of equity commitments from Continental European institutional investors. Using leverage, the fund will have £400 million to create a diversified portfolio of PRS assets, delivering sustainable and stable distributions over a long-term holding period.
Using a unique and comprehensive research approach Cording focuses on the lower-to-mid end of the market and has identified regional cities and locations outside Central London where demand for rented accommodation is strong and set to grow and where supply is predominantly made up of older stock and houses in multiple occupation (HMOs).
Cording was advised by Osborne Clark on the legal aspects of the deal. The AIFM of the fund in Luxembourg is Pancura SA and Aztec Group acts as central administrator.