£1.7bn partnership agreed for new BTR schemes

KKR, a leading global investment firm, and Apache Capital, a leading investment manager focused on UK residential real estate have established a joint venture to create a UK build-to-rent (BTR) multifamily housing investment platform.

KKR and Apache Capital will invest £610m to fund the delivery of BTR projects in core cities across the UK that will be developed and operated by Harrogate-based Moda Living, with sites already identified in Birmingham, Brighton and Hove, and London.

The developments will deliver over 4,000 apartments that are purpose-built and designed for rent as part of a £1.7bn development pipeline and will be the sequel to the operator developer’s existing city centre schemes.

The funding JV follows the success of Apache Capital and Moda’s second operational multifamily BTR scheme, The Lexington, in Liverpool, where 60% of apartments are leased two months after launch and Moda’s flagship scheme Angel Gardens development in Manchester, which is fully stabilised, having set new sector benchmarks for rents achieved.

The deal also comes after KKR announced plans to work with Moda’s earlier this month, funding the acquisition of New Garden Square in Edgbaston which will see the two work closely with developer Court Collaboration to design a 392-home neighbourhood within Calthorpe Estates’ Edgbaston Village regeneration.

Tony Brooks, managing director at Moda Living, said: “With the backing of Apache Capital and KKR we will deliver the next generation of build-to-rent neighbourhoods that will set new standards for style and service while meeting the growing demand for high quality rental housing that is responsive to modern lifestyles”.

Rosa Brand, director at KKR, said: “We are excited to work alongside Apache Capital, and Moda Living, both highly experienced strategic partners with excellent track records, over the long term, to deliver a best in class portfolio in the build-to-rent residential sector, which remains a thematic priority for KKR”.

John Dunkerley, CEO and co-founder of Apache Capital said: “Our strategic partnership with KKR demonstrates the growing maturity of the UK build-to-rent sector, which continues to attract global institutional capital thanks to its favourable demand-supply dynamics and defensive, counter-cyclical characteristics.

“This collaboration is consistent with our strategy of creating a premium product marked by high levels of service and amenity provision and we look forward to seeing the projects completed.”