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Grainger/APG forward fund Southampton PRS scheme

By James Buckley - Wednesday, May 09, 2018 8:41

Grainger and APG are forward funding and buying a 132-home PRS build to rent development, in Southampton from National Regional Property Group for approximately £27m.

The acquisition will be through the joint venture’s private rented sector (PRS) investment vehicle, GRIP REIT, and is expected to generate a gross yield of over 6.5% once stabilised. Completion is anticipated in late 2020.

National Regional Property Group will develop the site and P.M.C Construction, a Hampshire based contractor, will construct the scheme.

Grainger said the investment has strong prospects. In addition to its share of the rental income, Grainger will receive management fees, supplementing its overall returns.

Helen Gordon, chief executive of Grainger, said: “Today’s acquisition is confirmation of our ability to continue to source new and exciting PRS investment opportunities in attractive locations with compelling returns. Southampton is a target location for Grainger and this scheme on East Street will deliver 132 new high quality, purpose built rental homes and will allow us to utilise our operational base in Hampshire and provide our customers with great service and a great property to live in.”

Mike Harris, director of growth at Southampton City Council, said: “The development at East Street reinforces the importance of Southampton having a City Centre Master Plan. It gives developers the confidence to be part of the transformation of this part of the city centre, which is currently undergoing significant redevelopment.” 

“The provision of high quality apartments in the build to rent sector contributes to attracting and retaining talent in the city, which continues to drive the economic growth of Southampton. This £27m mixed-use regeneration project is a predominantly residential led scheme, adding to the city’s emerging private rental sector offering.”

GRIP REIT is focused on PRS investments in London and the South East and is 25% owned by Grainger and 75% owned by APG. Grainger is the property, asset and development manager for the REIT.

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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