Greystar Announces Partnership of up to £2.2bn with ADIA to Develop BTR in London
Greystar Real Estate Partners has announced a new strategic partnership with a wholly owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”) of up to £2.2 billion to develop build to rent housing in London and its surrounding commuter towns.
The growth strategy will focus on delivering new assets through ground-up development leveraging Greystar’s extensive experience and track record in the market. Since launching its UK business in 2013, Greystar has executed more than £8bn in transaction activity in the market. The strategic partnership will be supported by Greystar’s extensive pipeline and an operating platform of more than 700 team members across Europe.
The strategic partnership is targeting a development pipeline of approximately £1.8bn in total capitalisation and equity commitments of up to £750m between the partners. Greystar agreed to purchase a 0.84-acre site subject to planning on Lombard Road in Battersea, London, for £31m in June 2021 that will become the partnership’s first new seed asset.
This represents the second portfolio of scale to be developed by Greystar with ADIA subsidiaries in Europe. Since 2015, Greystar and ADIA subsidiaries have created a portfolio of more than 6,000 homes for students and young professionals in the Netherlands under the OurDomain brand.
In conjunction with the new strategic partnership, Greystar will assume management of the Fizzy Living portfolio, which comprises nearly 1,000 homes, from Metropolitan Thames Valley Housing (“MTVH”). Greystar also confirms the acquisition of Fizzy Living from MTVH at an implied portfolio valuation in the region of £400m. As part of the transaction, the Fizzy Living brand and more than 30 employees will move across to Greystar, significantly increasing the company’s already sizeable footprint in London.
The Fizzy Living assets are well-located and close to public transport in Canning Town, Lewisham, Epsom, Stepney Green, Poplar, Walthamstow, Hayes and Silvertown. Greystar will implement a proactive value-add strategy across the portfolio, including capital improvements and other operational enhancements.
Mark Allnutt, senior managing director for Europe, Greystar, said: “Demographic trends and a severe structural undersupply of housing is driving demand for high quality rental homes in the UK, so this remains a high conviction investment strategy for Greystar. We have a highly successful relationship with ADIA in the Netherlands and now have a unique opportunity to create a rental housing portfolio of substantial scale in London and its surrounding commuter towns. The Fizzy transaction provides us with day one access to eight operational assets and a host of new team members that we are pleased to welcome to Greystar. In addition, we will grow the portfolio through our newly formed partnership with ADIA from the ground up.”