UK housebuilder Berkeley has announced its plans to establish its own BTR platform alongside its core trading business.
The firm revealed its plans in its annual results for the year ended 30th April 2024.
According to the statement, the launch of the BTR platform aims to help Berkeley maximise returns, after recognising the strong occupational and institutional investment demand for rental homes in London and the South East.
The housebuilder has identified around 4,000 homes across 17 of its sustainable brownfield regeneration sites as an initial portfolio for its platform.
Developed over the next ten years, and broadly representing a 10% increase in delivery, the portfolio will be financed by a combination of internally generated funds (over and above annual scheduled shareholder returns), debt secured against rental properties once income generating, and the introduction of third-party capital at the appropriate time — thus fully supporting Berkeley’s long-term corporate 15% pre-tax ROE target.
“Having sold over 1,000 homes across five sites in the past three years to institutional investors on a forward-commitment basis, we now believe that adopting a more strategic route to this market will drive best value for these assets by creating a portfolio of scale, professionally managed, with proven income levels stabilised prior to disposal,” said Rob Perrins, chief executive at Berkeley, in the official statement.
“With strong demand and a systemic under-supply of high-quality homes to rent in and around London, upward pressure on rents is forecast to remain.
“We will be locking in build costs early in the investment cycle and with yields linked to long-term interest rates, there is strong potential to drive value accretion over the next 10 years, as well as incremental income while the properties in the portfolio remain owned by Berkeley.”
