M&G to build £1bn build-to-rent portfolio with Korean pension fund

Both partners have committed £300m of equity to the venture, which aims to build a portfolio of homes worth £1bn. M&G is investing via its £130bn with-profits fund, which manages assets for 4.5 million UK policyholders. The partners will also supplement the venture with some debt.

The venture will focus on delivering urban mid- and high-rise build-to-rent, known as ‘multi-family’ in contrast to ‘single-family’ suburban houses, over the next three years.

NPS is already active in the UK living sector. In January, the pension fund committed £300m to Long Harbour’s UK single-family build-to-rent fund.

Other big investors have pledged significant sums of money to the UK housing sector in recent months. In October, Legal & General announced a £2bn commitment to housing and infrastructure projects over the next five years. The same month, Australia’s largest pension fund pledged to build a £500m UK living platform.

Martin Towns, global head of M&G Real Estate, said: “This is a powerful demonstration of our business model in action – mobilising international capital to invest into UK housing in a sector where there is a shortage of high-quality homes.

“Through our investment in the real economy we can build more homes where they are most needed, whilst delivering resilient, long-term returns for pension savers in both the UK and internationally.”