Ballymore, the Irish property development company, is seeking an investor to provide £150 million of backing for its first launch into London’s flourishing build-to-rent sector.
The company, along with its Singaporean development partner Oxley Holdings, is looking for an investment partner to build 272 rented homes as part of its Royal Wharf regeneration project in east London, according to the Telegraph.
Property agency CBRE is handling the scheme.
Dublin-based Ballymore, one of Ireland’s largest builders, was founded by Sean Mulryan, who was one of the country’s best-known developers during the housing boom in the early 2000s.
The company built a number of large housing developments, but when the property market crashed many of its loans were transferred to Ireland’s bad bank Nama.
It has since repaid the money it borrowed and in recent years has built a number of high profile properties in both Ireland and the UK.
Ballymore is one of the developers behind Battersea’s glass-bottomed “sky pool”, which will allow residents to swim from one building to another, enjoying dramatic London skyline views as they paddle suspended 10 storeys above ground.
Completely transparent and measuring 27.5m long, 5.8m wide and 3m deep with a water depth of 1.2m, the sky pool is a world first.
Joint venture EcoWorld Ballymore is also managing the London City Island project, dubbed East London’s “Mini Manhattan”, which includes 1,600 residential units and 20,000 sq m of office space.
Ballymore’s move into the build-to-rent sector follows a number of major developers and institutional investors looking to capitalise on the demand for well-managed rented homes, especially in large cities.
UK investors such as Legal & General and M&G have recently moved into the sector, and developers including Quintain, which is backed by US private equity firm Lone Star, are building thousands of flats for rent.
John Mulryan, general managing director of Ballymore Group, said: “There is a lack of high-quality options for the thousands of people in London that wish to have the flexibility of renting.
“By entering the build-to-rent market with Deanston Wharf – the first of many build-to-rent properties we are planning – we will provide the same high-quality homes that Ballymore is renowned for in this growing market.”
DealMakerz thinks Ballymore’s foray into the build-to-rent sector makes a lot of sense.
The number of UK residents renting privately has doubled over the past decade, with some 20% of households (and 30% in London) now in private rented accommodation.
In 2017, the build-to-rent market attracted £2.4 billion in investment and is forecast to grow by a further 180% over the next six years.
Many in the property world, such as investment firm Venn Partners and consultancy Lichfields, have touted it as a way to solve the UK’s housing crisis.
The sector has also received considerable government support, including a £1 billion build-to-rent fund.
According to the British Property Federation, there are 117,893 build-to-rent units either completed or planned across the UK. In London, there are a total of 60,530 units compared with 57,363 units outside the capital.