In a bid to capitalise on the housing crisis in London, UK, Canada’s public pension investor will stump up £350m for a build-to-rent scheme in Elephant & Castle with property and infrastructure group, Lendlease.
80% funded by the Canada Pension Plan Investment Board (CPPIB), the plan involves a total £450m investment in rental homes at Lendlease’s £2.3bn Elephant Park development; Lendlease will invest the balance.
CPPIB manages a trove of more than C$310bn on behalf of 20 million Canadian contributors. It reports to the Canadian parliament.
Construction has already started at Elephant Park, and the first homes in this phase are expected to be completed in 2020.
This is just the start, the organisations said yesterday. They plan to invest £1.5bn in the UK build-to-rent sector in London and across the UK under a 50:50 joint venture.
Lendlease will develop, construct, and manage the homes on behalf of the partnership.
Dan Labbad, CEO of International Operations at Lendlease, said: "In recent decades, structural shifts in the housing market have meant that demand has outstripped supply in the private rented sector, leading to a shortfall of homes in London and across the UK.
"Today’s announcement is a logical next step for us as a business and delivers on our strategy to grow our urban regeneration pipeline and accelerate the delivery of much-needed homes, by working with institutional capital partners to launch this new asset class for Lendlease’s investment platform."
Andrea Orlandi, Managing Director & Head of Real Estate Investments Europe at CPPIB, said: "This investment is a great opportunity for CPPIB to further diversify our European real estate portfolio, while at the same time addressing a need in the UK.
"Through this partnership, we are able to access a sector we believe is poised for long-term growth, and we are pleased to be able to do so with Lendlease, one of our existing top global partners."
Image: Elephant Park is a £2.3bn regeneration scheme on 28 acres of land in London’s Elephant & Castle (Lendlease)