Long Harbour, PSP Investments and Cadillac Fairview (CF), the real estate arm of the Ontario Teachers’ Pension Plan, are establishing a £1.5 billion build to rent joint venture.
The joint venture will incorporate Way of Life, Long Harbour’s residential management business, to combine investment, development, and operations capability within a single market-leading new platform.
The Long Harbour Multi Family (LHMF) joint venture was established in 2019 between Long Harbour and PSP Investments, one of Canada’s largest pension investment managers, with £500 million of initial capital which is now almost fully committed.
Two years on, Long Harbour and PSP Investments have welcomed CF into the partnership to support the growth of the platform as it scales up its pipeline and operations, said the companies.
CF is a globally focused owner, operator, investor, and developer of best-in-class real estate across office, residential, life sciences, industrial, retail and mixed-use asset classes. CF manages $35 billion of assets across the Americas and the United Kingdom, with further expansion planned into Europe and Asia.
”In total, LHMF now has over £1.5 billion of capital to invest into build to rent assets, which will include both forward funding of projects and direct development. All assets in the portfolio will be managed by Way of Life, Long Harbour’s dedicated residential management business, which has over 2,800 units in operation and under development,” said the companies in joint statement.
LHMF’s portfolio of assets includes a development of over 480 homes for rent at Ashley Road, Tottenham Hale, which LHMF has forward funded with a total investment of £226 million across two phases of development. The project is due to complete in 2023, with the first phase to launch in August 2021.
William Astor, Chief Executive at Long Harbour, said: “This latest round of investment brings LHMF’s total capital to in excess of £1.5 billion, which, combined with our Way of Life operational capabilities, creates one of the UK’s largest and most compelling Build to Rent platforms. Our priority for new sites will be London and the South East, where we have a strong pipeline of potential assets in addition to our existing projects.
“Way of Life, which is already delivering an innovative, community-focused experience across LHMF’s assets, will be an integral part of the design and delivery of our pipeline of new projects. Directly managing our assets provides greater control over the end-user experience and, ultimately, even stronger long-term performance for investors.
“We are very pleased to be welcoming Cadillac Fairview to the LHMF platform alongside PSP. This is a long-term, strategic partnership and a strong endorsement for Long Harbour’s vertically integrated model, and our investment, asset management, development and operations capability.”
Stéphane Jalbert, Managing Director, Real Estate Investments – Europe and Asia Pacific at PSP Investments, said: “We are pleased to continue growing our established and successful partnership with Long Harbour and now Cadillac Fairview, accelerating the scale and diversification potential of the venture. UK Build to Rent is a conviction sector for PSP and complements our global residential portfolio. Together, we aim to provide high quality housing that will have a positive impact on local communities while providing stable investment returns.”
Jenny Hammarlund, Head of Europe, Managing Director at Cadillac Fairview, said: “The residential sector is a key area of focus for Cadillac Fairview globally, and we are pleased to be investing in the sector at scale in the UK alongside Long Harbour, an innovative Build to Rent operator, and PSP Investments, a strong JV partner with a shared vision. This investment aligns with our strategic objective of expanding our investment portfolio in Europe by forming partnerships with best-in-class operators and developers in attractive asset classes, such as residential, life sciences, office and logistics. It also complements our global residential portfolio, which includes, large active pipelines across the US and Canada.”