Grainger venture forward funds Milton Keynes development

Grainger’s joint venture with APG, GRIP REIT, has unconditionally agreed to forward-fund and acquire a 139 home build-to-rent private rented sector development in Milton Keynes, the listed residential landlord announced on Tuesday, for £30.5m from the High Street Group.

The FTSE 250 firm said the 90,000 square foot scheme in the centre of Milton Keynes comprises 139 homes, resident amenity and commercial space, 170 bicycle storages spaces, and 120 parking spaces.

United Living was the appointed contractor for the scheme, Grainger confirmed.

Grainger’s board said the project was a “highly attractive” investment in central Milton Keynes with “strong” future prospects, and was well aligned to GRIP's predominantly London-based investment focus.

In addition to the projected gross yield on cost of over 6% once operational, Grainger was receiving management fees, supplementing its overall returns.

The acquisition followed Grainger's recent announcement of its investment in a 236 home build to rent scheme in Pontoon Dock, London, in partnership with the Local Pensions Partnership.

“We are pleased to announce another successful acquisition of an attractive PRS asset in a highly desirable location with a strong and growing rental market, this time through our GRIP PRS REIT in partnership with our long standing partner, APG,” said Grainger chief executive Helen Gordon.

“Our ambitious investment plan continues at pace with around £500m of Grainger's own capital committed to new PRS investments.”

GRIP REIT is focused on PRS investments in London and the South East and is 25% owned by Grainger and 75% owned by APG.

Grainger is the property, asset and development manager for the REIT.

“As the build to rent, or private rented sector, continues to grow due to demand for homes outstripping supply, we developed a plan to create a community with a modern village feel that will cater particularly for the needs of aspiring young professional people in Milton Keynes,” said chairman of the High Street Group, Gary Forrest.

"We are delighted that such a successful and reputable specialist in PRS as Grainger is now acquiring the site to take the project forward.”