£20m sale and leaseback deal agreed for 77 homes
Moorfield Group, a real estate private equity fund manager acting on behalf of Moorfield Real Estate Fund IV (MREF IV), has acquired a 93,000 sq ft show home portfolio from housebuilder Avant Homes for £20m.
Located across Yorkshire, the Midlands and Scotland, the 77 show homes have been immediately leased back to Avant Homes on an average three-year term.
On expiry of the individual leases, Moorfield will either sell the homes on the open market, leveraging Avant Homes’ sales channels, or rent the homes to complement its existing build-to-rent activities.
Moorfield Group and Avant Homes have previously worked together, with the former acquiring the developer’s Edinburgh city centre £750m mixed-use Quartermile scheme in 2013 for an undisclosed sum.
Charles Ferguson-Davie, chief investment officer of Moorfield Group, said: “Despite the volatility caused by the COVID-19 pandemic, we remain convinced that the residential sector will continue to be a resilient asset class, providing ongoing opportunities to generate outperformance on behalf of our investors.
“We have pioneered investment into a range of residential use classes and this innovative transaction provides our investors with further diversification.”
Ross Netherway, head of origination at Moorfield Group, added: “Through this investment we are cementing our relationship with one of the UK’s most dynamic and ambitious housebuilders.
“It is the first of what we hope will be a number of similar investments, assisting housebuilders that are seeking alternative ways to accelerate the delivery of new housing for sale and for rent across the UK.”
Currently operating in Yorkshire, Scotland, north east England, and the Midlands, Avant Homes has a turnover of £483m, employs around 780 people and is committed to achieving further continued growth.
Avant Homes chief operating officer, Mark Mitchell, said: “This is an excellent transaction for both businesses.
“We are very pleased to be working with Moorfield Group, having begun discussions at the start of this year.
“COVID-19 has presented the housebuilding industry with many challenges, which we have responded to dynamically, with the safety and wellbeing of our people as our first priority.
“Looking ahead, we remain committed to continuing to execute against our growth strategy, underpinned by the resilience and agility of our business, the excellence of our product and the commitment of our people.”
Moorfield Group was advised on the transaction by Cushman & Wakefield and Shoosmiths.