Starlight Investments says it has joined with a group of global institutional partners to create a new build-to-rent platform in the United Kingdom, and the venture is being kicked off with three BTR communities comprising 922 suites and valued at about $381 million (all figures Cdn).
The venture is Starlight's first step into Europe, and Starlight plans to “initially acquire” up to $1 billion of assets for the initiative.
The three initial build-to-rent communities are located in the cities of Manchester, Liverpool and Ashford.
“We are pleased to have global institutional capital partners support Starlight in our European expansion," said Daniel Drimmer, Starlight’s founder and chief executive officer, in the announcement.
"The United Kingdom represents a nascent rental market with a fundamental housing imbalance between supply and demand.”
The investors believe the United Kingdom residential market is backed by strong fundamentals and what they call “a growing imbalance between supply and demand”. It sees conditions similar to many major Canadian and North American markets, notably the continued deterioration of home affordability and increasing demand for high-quality rentals.
Thus, Starlight and its partners consider this an opportune time to enter the United Kingdom market and provide new rental supply.
The United Kingdom strategy
“Entering the United Kingdom build-to-rent market is a natural extension of Starlight's North American residential expertise that will further allow us to invest with impact and strengthen Starlight's brand as a global residential investor and asset manager."
The initiative will target BTR projects in London commuter belt markets as well as up to 10 other major cities across the United Kingdom. The target to acquire $1 billion of assets would represent a portfolio of 2,000 – 2,500 build-to-rent units.
In executing the strategy, Starlight plans to leverage its North American experience (which includes $2 billion of direct acquisitions from developers) to deliver the fund's growth objectives and support the U.K. asset management team.
"We are proud to be working with some of the best developers across the United Kingdom to deliver high-quality communities for residents," said Jonnie Milich, director, Starlight Investments UK, in the announcement.
"Relationships with reputable, local BTR experts coupled with Starlight's extensive track record of residential investment and asset management has positioned us extremely well to execute in this market."
The entry into the United Kingdom BTR market represents “a meaningful first step” in the Toronto-based company’s broader European residential strategy.
About Starlight Investments
Starlight Investments is a real estate investment and asset management firm with $25 billion in assets under management.
A privately held owner, developer and asset manager of over 77,000 multiresidential suites and over 9 million square feet of commercial property space, Starlight offers a range of investment vehicles across various real estate strategies.