German real estate group Patrizia has made a major move into the UK residential market with the launch of a dedicated private rented sector fund and the announcement of a 500-home PRS scheme.
Manchester’s First Street project will be Patrizia UK’s first build-to-let development in the country and will comprise 500 new homes and around 1m sq ft of office space.
Patrizia has not revealed the scale of its proposed PRS fund but it is likely to be sizeable, with the company already managing 80,000 homes across mainland Europe, worth a total of €7bn (£5.07bn).
The 8 ha First Street site is already partially developed and currently includes a 208-bed hotel, nine bar and restaurant units and 700 parking spaces.
The remainder of the development is expected to last between five and seven years.
Patrizia UK managing director James Muir said: “We have been carefully implementing our strategy of investing in high-growth locations across the UK.
“With this investment, our property assets under management in the UK now amount to more than £1bn.
“Driven by attractive economic and demographic fundamentals in Manchester and the growing trend for urbanisation, we are anticipating strong demand for this centrally located, high-quality accommodation, which will be tailored to the private rental sector.
“Together with the new commercial buildings, we expect to create an attractive investment opportunity for institutional investors.
“We see this project as an ideal first investment for our planned Patrizia UK PRS Fund.”
A number of domestic and overseas investors have for some time been looking to move into the PRS.
Legal & General is thought to have put £1bn behind a PRS development arm and made its first investment into the sector earlier this year when it bought a £25m regeneration site in Walthamstow, east London.
Elsewhere, a subsidiary of Middle Eastern sovereign wealth fund the Abu Dhabi Investment Authority has invested £200m into PRS group Fizzy Living.