Greystar raises €725m for pan-European residential fund

Build to Rent specialist Greystar has raised €725m (£623m) for a pan-European fund aiming to drive returns from the construction or acquisition and improvement of thousands of rental properties across the continent, including the United Kingdom (UK).

The US real estate firm’s fund manager subsidiary Greystar Europe Investment Management announced yesterday that it has secured €725 million in equity commitments from a “diverse group of global institutional investors” as part of a target of raising $1billion.

The vehicle is a closed-end fund, meaning capital is raised once through an Initial Public Offering and then assets are leveraged further to increase their value.

The investment comes just a month after Greystar opened its 546-home “Ten Degrees” scheme in Croydon, designed by HTA, and thought to be the tallest modular constructed tower in Europe.

Greystar will identify strategic investments in “undersupplied markets with favourable demographic trends” with a focus on multi-family and purpose-built student accommodation in “top cities” in the UK and other major Western European nations.

It aims to carry out development of new Build to Rent units but also “add value to assets through capital improvements, repositioning and operational enhancements.”

The move continues Greystar’s drive into European rental markets. It oversees a global portfolio of more than 165,900 owned units.

In the past few years in the UK it has built up a property portfolio worth $4.2 billion, including 11,360 units of student and rental housing.

Greystar’s white paper on European rental housing published in November quoted figures from research firm Green Street advisors saying that only 2% of the United Kingdom’s institutional housing stock was institutionally owned.

It said that 98% of homes were “not professionally managed and unlikely to offer residents any amenity, to say nothing of building maintenance or security of tenure. We expect coming out of the pandemic, a shift towards home and an emphasis on wellbeing will increase space requirements generally and demand for amenitised space in particular”

Mark Allnutt, senior managing director, Europe, Greystar, said: “We are excited to take advantage of a market where demographic trends combined with the structural undersupply of housing is driving demand for high-quality rental properties across Europe.”