Property and infrastructure group Lendlease and Canada Pension Plan Investment Board (CPPIB) have announced the launch of a UK build-to-rent investment partnership with an initial target to invest £1.5bn.
The partnership, announced on 16 January 2018, will initially invest £450m in the next phase of new homes for private rent at Lendlease’s £2.3bn Elephant Park development in Elephant & Castle.
CPPIB will invest £350m for 80% and Lendlease will invest the balance.
The latest announcement is in addition to the £800m already committed by Lendlease to housing and infrastructure.
Construction has already begun and the first homes in this phase are expected to be completed in 2020.
The partnership will also pursue opportunities within the residential urban regeneration activities of Lendlease in London and across the UK under an equal stake joint venture.
The partnership aims to help address the housing shortage in the UK.
Lendlease, headquartered in Sydney, Australia, will develop, construct and manage the build-to-rent homes on behalf of the partnership.
Lendlease CEO of international operations Dan Labbad 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.
“CPPIB is already a highly valued, long-term global partner of Lendlease and we look forward to extending our relationship through this partnership.”
CPPIB managing director, head of real estate investments for Europe Andrea Orlandi 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.”