UK-focused real estate investment manager Moorfield Group has launched MREIT, its new private real estate investment trust that will initially target acquiring existing and newly-built homes within two residential-for-rent sub-sectors: single-family homes (SFH) and student houses of multiple occupation (HMOs).
MREIT has raised £100m of capital to date and is targeting over £500m of investment capacity. The REIT is aimed at institutional investors such as pension funds and insurers rather than retail investors.
MREIT is looking to take advantage of the market opportunity presented by buy-to-let investors exiting the rental market due to increased taxation, mortgage costs and regulation. Nearly half-a-million landlords are expected to sell their rental homes in the next five years according to property consultants Hamptons International, with 140,000 leaving the market last year.
Charles Ferguson Davie, Chief Investment Officer at Moorfield Group, said: “We believe that MREIT’s acquisition strategy will offer an attractive exit option for buy-to-let investors looking to sell, as well as housebuilders that are increasingly considering bulk sales in the face of a weakening ‘for-sale’ market.
“We are targeting locations with strong underlying demand, identified for our core demographics – long-term renters and domestic students – but where new supply is limited to ensure that MREIT benefits from sustainable rental growth.
“The success of US single-family REITs demonstrate a way forward for institutional investment into UK residential-for-rent and we are confident that MREIT will help unlock this asset class, which has been difficult for institutions to access due to the granularity and fragmented ownership of existing stock.”
MREIT’s current portfolio comprises c.£50m of investments made so far by Moorfield’s fifth value-add fund, Moorfield Real Estate Fund (MREFV), which is split approximately 50:50 between single-family homes and student HMOs.
Moorfield has been active in both these market segments since 2020 and also separately manages c.£100m of similar assets through the manager’s fourth value-add fund, MREFIV.
In addition to these residential-for-rent strategies, Moorfield has been a longstanding investor across the living sectors, being an early entrant in build-to-rent (investing since 2012), retirement villages (investing since 2008), and purpose-built student accommodation (investing since 1997).
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