The BMO UK Housing Fund (the Fund) has completed the acquisition of the Hughes House scheme in Liverpool city centre, through a £40 million forward funding agreement, signalling the first round of deployment for the Fund. The agreement will provide 258 new homes for the city.
The Fund aims to address a distinct gap in the UK housing market by delivering high quality, sustainable, community based rental property, targeted at low to middle income households whose needs are not currently being met by the existing private rented sector. The Fund’s investment strategy is focused on local housing needs and will invest across house types including city apartments and suburban housing.
Peter Lowe, fund manager at BMO Real Estate Partners, said: “This acquisition provides us with an opportunity to support the delivery of affordable private rental housing in Liverpool while also generating sustainable, inflation-linked long term income returns for investors. The scheme will enable us to satisfy local demand, particularly from key workers employed within the local authority, city centre hospitals and nearby universities. We expect to follow up this acquisition with a further pipeline of near-term opportunities as we continue to support the delivery of affordable housing solutions across the UK.”
BMO UK Housing Fund
The objective of the Fund is to innovate and improve the private rented sector in the UK and becoming a trusted partner of our stakeholders – investors, residents, partners, local authorities and communities. The Fund, which is targeting a 6% plus return and circa 4.5% annual distribution yield, is governed by a progressive social agenda, aligning with rigorous ESG and impact investment objectives, has attracted investors including Big Society Capital and Swansea LGPS. Acknowledging the requirement for a focused long-term solution to the UK housing shortage, the Fund is open ended and has also been seeded by BMO Real Estate Partners and Home Group.
Located on London Road, the scheme sits within the local regeneration and employment initiative known as the Knowledge Quarter & Fabric Quarter, which are offering wider community and built environment improvements with good access to outdoor pursuits and open green spaces. The scheme is ideally located for those residents working for some of the largest key worker employers in the city, with the Royal University of Liverpool Hospital as well as both Liverpool John Moores University and The University of Liverpool all within walking distance, in addition to city centre workers. The scheme also has strong access to transport links with Lime Street Station just a six-minute walk away.
Once complete the 258-unit scheme will comprise 144 one-bedroom apartments, 99 two-bedroom apartments and 15 studio apartments and will operate Home Group’s innovative flexible rent leasing mechanism, which provides a flexible mix of market rent and discounted rent units. Home Group Developments sourced the project and is the main developer working with UK Land and Property and Equans (part of ENGIE Group) to build out the scheme. Allsop also supported the transaction and CBRE are the valuers.
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