Tech-powered rental housing investor enters UK market with Manchester deals

Samantha Kempe

Manchester is the base for a property investment platform that acquires and manages rental homes on behalf of institutional investors.

IMMO has announced its re-entry into the UK market with a series of acquisitions in the region.

The ‘Northern Triangle’ city was chosen, alongside Leeds and Sheffield, for its solid underlying market fundamentals and attractive risk/return profiles, displaying both low house price volatility and strong rental yields.

These initial acquisitions form part of the firm’s plans to invest approximately £1bn to buy and retrofit at least 3,000 rental homes across the UK by 2024.

According to IMMO’s recent analysis of the UK’s rental market, three local authorities in Greater Manchester – Manchester, Wigan and Salford – are among the 10 most attractive for institutional investors in terms of risk and return trade off, informing its decision to focus acquisitions in the city.

Manchester was recently identified as a rental price ‘hotspot’ by Rightmove, with average asking rents in the city growing 20.5% in the 12 months to the third quarter of 2022.

Using artificial intelligence and its own proprietary technology, IMMO aggregates private rental portfolios by acquiring individual, dispersed homes on behalf of institutional investors such as pension funds and insurers.

The business plans to leverage its tech-based approach to buy and rent out more than 10,000 energy-efficient homes across Europe, having already amassed portfolios in Germany and Spain.

The proptech company, which is based in London, seeks to replicate its success in Germany and Spain in the UK, having committed at least £1bn of institutional capital to acquiring and upgrading the country’s rental homes. In doing so, IMMO seeks to help bring down energy costs for renters by providing more energy-efficient homes.

IMMO will retrofit its UK homes to a minimum EPC C rating where possible. With the Department of Levelling Up, Housing and Communities estimating that retrofitting privately rented housing to EPC C costs an average of £7,650 per home, the firm’s plans could save taxpayers, property-owners and the Government at least £25m in refurbishment costs.

As well as retrofitting existing homes, IMMO is also exploring acquiring new-build homes in energy-efficient developments as part of its plans to build a portfolio of properties with a minimum EPC C rating.

Samantha Kempe, chief investment officer at IMMO, said: “With our main office in London, we’re excited to enter the UK’s rental housing market. Manchester’s housing market displays all the right characteristics – chiefly appropriate risk/return profile – for us to start on our mission of acquiring and upcycling over 3,000 homes across the UK.

“With the UK’s private rental housing stock among the oldest and draughtiest in Europe, it is no surprise there is growing demand from consumers for more sustainable homes. Limited government resources mean that the investment needed to retrofit Britain’s housing must come from elsewhere, and there is no better place to look than institutional investors, who are seeking investments that generate stable income streams and allow them to meet their ESG criteria.

“We’re also looking to support Manchester’s economy through hiring locally and creating new rental homes fit for a modern workforce.”

Last year, IMMO raised $75m in equity in Europe’s largest ever series B proptech funding round, to be invested in growing the business and refining the tech that powers IMMO’s platform.

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