Apache Capital Partners, a London and Gulf-based private real estate investment management firm, has agreed to form a joint venture with Moda Living to deliver £1bn of PRS development in UK regional cities.
Moda, itself formed by Caddick Group and Generate Land, is planning schemes in Manchester's NOMA and Liverpool's Princes Dock.
The new joint venture with Apache aims to develop 5,000 purpose-built private rented sector units. Apache Capital will be the majority partner of the joint venture, which has spent two years in due diligence.
Moda said: "The portfolio concentrates on regional centres where population growth and an undersupply of residential accommodation looks set to trigger rental and capital growth over the next few years. A focus on prime locations attracting the ideal tenant profile for PRS developments; 20-44 year olds with disposable income who demand locations and buildings that come with high quality services and amenities."
The seed asset is the 458-unit Angel Gardens, Manchester, located in the centre of the Co-operative Group and Hermes' 20-acre NOMA masterplan.
Richard Jackson, co-founder and managing director of Apache Capital Partners, said: "At Apache Capital, we have seen a strong demand from our Middle Eastern investors in the UK's Private Rented Sector. This is partly because PRS is already an established sector in the region, the sector's continuing supply/demand imbalance in the UK, but also coupled with the prevailing lifestyle shift toward flexible living that delivers high quality amenities and services. Following two years of intensive due diligence, we, at Apache Capital, are very pleased to be forming this strategic joint venture with Moda Living, our development and operating partner.
"The 5,000-unit secured portfolio provides us immediate scale and Apache Capital and Moda Living will currently be the largest owner of regional purpose-built PRS and the second largest owner overall in the UK.
"This strategy builds on the success of Apache Capital's Social Infrastructure investment platform, where we have aggregated an institutional grade portfolio of assets in the student accommodation and healthcare sectors."
Johnny Caddick, director of Moda Living, added: "We're really pleased Apache Capital acknowledge and understand the vision Moda Living has to deliver a best-in-class PRS product and we are looking forward to delivering our portfolio with them as our strategic partners.
"Traditional views on renting are changing and more people are looking towards PRS for long-term tenure. With this in mind Moda Living's aspirations are to create lifestyle developments that focus on putting the tenants – our customers – at the heart of the concept. This will ensure we constantly evolve to stay ahead of the market and the changing face of renting as we know it, which enables us to create living spaces that are tailored specifically for city-centric lifestyles."