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Countrywide and Hermes join forces to create PRS fund

Property group Countrywide and Hermes Investment Management have joined forces to create a residential property fund operating in the private rented sector.

The fund vehicle has been set up with an initial £95m of seed equity, including three assets in Manchester, Birmingham and Nottingham.

Both groups will seek to raise further capital and bank debt to fund investment in new and existing residential assets throughout the UK.

Countrywide finance director Graham Bell said: “As the UK’s largest residential property services company with over 1,000 branches, the size and scale of Countrywide means it is uniquely placed to play a leading role in building and managing a large residential investment vehicle.

“The fund leverages Countrywide’s platform to overcome the main barriers to institutional investment in residential property, namely difficulty in finding areas with both attractive and sustainable yields, managing operating costs and sourcing attractive assets.”

Hermes Real Estate chief executive Chris Taylor added: “The investment thesis within the residential sector for long-term investors remains compelling with a major imbalance between supply and demand; the major constraint to institutional investors has been the lack of a quality operator and access to stock.

“We are excited about the opportunity to grow the fund to be the leading UK private rented sector investment vehicle available.”

Earlier this month Construction News revealed that Legal & General is considering a major swoop into the private rental market with plans to build homes for the sector through a new £1bn development arm.

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