Telford Homes strikes investor alliance for London plan
Housebuilder Telford Homes has struck a major deal with two global real estate giants, amid efforts to offset woes in the capital’s traditional housing market by doubling down on Britain’s growing rental sector.
City PM can reveal that the residential developer is partnering up with M&G and Invesco in a bid to tap into the capital’s build-to-rent (BTR) market, which has largely avoided the recent slowdown in activity felt across much of London’s wider residential housing scene.
The strategic partnership, which is likely to see Telford embarking on a number of forward-funding BTR developments worth between £75m and £100m, comes less than a week after the group slashed its profit outlook.
In an update on Thursday Telford pledged to put an “even greater focus” on BTR, which is set to comprise more than 50 per cent of the group’s development pipeline before the end of the year, after warning that full-year profits to the end of March would be lower than previously expected.
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Chief executive Jon Di-Stefano said that while the group would have continued to invest in BTR regardless of wider property conditions, “the fact that the market has been more challenging from an individual sales point of view exacerbates the move”.
However, Di-Stefano added that “BTR would have taken off regardless of current problems in the market… there is an ever increasing demand from people looking to rent rather than buy. That is not a result of Brexit or current sentiment. It is more about ongoing affordability.”
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US-based Invesco will have exclusivity when bidding with partners for Telford schemes of more than 200 BTR homes, while British investor M&G will be the group’s priority partner for sites up to 200 BTR homes.