The Canada Pension Plan Investment Board is strengthening its partnership with Lendlease Group in the U.K.’s built-to-rent sector with an agreement to invest in a new building at Elephant Park in south London.
The transaction, which builds on the partnership first announced in January 2018 with an initial target of investing £1.5 billion in the sector, includes an additional investment of about £80 million in the next phase of new build-to-rent homes. The CPPIB will invest about £40 million for 50 per cent, while Lendlease will invest the balance.
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“The fundamentals continue to support the build-to-rent sector in the U.K. with an increasing number of households shifting to private rentals, particularly in major urban centres,” said Andrea Orlandi, managing director and head of real estate for Europe at the CPPIB, in a press release. “By working with Lendlease, one of the largest global real estate developers, we will aim to address the build-to-rent shortage and pursue additional investment and regeneration development opportunities in the U.K.”
The new 18-storey building with 118 build-to-rent homes will be located at Elephant Park, a 28-acre regeneration project. The first phase of homes in the partnership between the CPPIB and Lendlease are already near completion, with the first residents expected to move in later this year.
“This deal demonstrates the strength of our partnership with [CPPIB], which is already set to bring hundreds of high-quality new build-to-rent homes to Elephant Park in south London,” said Tom Mackellar, chief financial officer for Lendlease Europe. “The sector is rapidly expanding in the U.K. and we look forward to helping meet the demand for that type of property.”
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