Barings Real Estate has just snapped up a £57m PRS development in Manchester, less than two months after it coughed up £46.75m for its first UK PRS scheme, the Keel in Liverpool.
At its completion in October 2020, Cornbrook, which is being developed in a joint venture with Glenbrook, will provide 280 apartments in a mixture of one-, two- and three-bed units with a range of amenities at the top of the development’s two 14-storey towers. Combined with the 497 homes planned for the Keel, Barings has made substantial commitments to the PRS market in the North West in a matter of weeks.
Property Week spoke to Barings managing director and head of UK real estate transactions, Darren Hutchinson, to find out why the investor is embracing the UK’s PRS market and whether it plans to move beyond the North West.
What attracted you to the Cornbrook development?
We have a presence in Manchester already, with our office building Landmark on St Peter’s Square, and we have a great deal of confidence in the city’s economy. There’s a wide range of industry sectors within the city and the cost of living and quality of life are very attractive in the regions. Manchester is great and it’s clearly on an upward trajectory. We want to be a part of that.
Barings has done two North West PRS deals in the space of a few weeks. Can you keep up the pace?
The velocity is coincidental, but we do have an appetite for the sector across the UK and we have a number of clients who are very interested in it.
We have been, and will continue to be, looking for opportunities in strong cities with supporting demographics to begin that investment in, such as Bristol, Reading and Leeds. We will also do more in the North West, but we are likely to stay outside London as we are very much bound to affordability.
Why are you attracted to the UK PRS market?
If you look at the shortage of supply versus demand over the last 20 to 40 years, that structural imbalance is the reason we are very much focused on this sector. Also, occupiers are recognising that they would like to live in a more managed environment and expect high quality. As an institutional landlord, we can provide that, which is different to the more traditional route of buy-to-let.
Will Barings hold on to assets like Cornbrook and the Keel in the long term?
We’re very much committed to the projects long term. We’re not developers per se – in it to build and sell immediately. The intention is to be involved for a longer period of time, confirming our commitment to the region and the sector. I am sure we will commit to more opportunities during the coming years.