Private Equity Eyes More London Rental Housing as Greystar Nears Deal

(Bloomberg) -- Private equity firm Greystar Real Estate Partners is set to buy London rental housing business Fizzy Living, according to a person familiar with the matter.

The U.S. residential investor has entered exclusive negotiations with affordable housing landlord Metropolitan Thames Valley to buy the purpose-built rental operator, said the person, who asked not to be identified because the details aren’t public. The terms of the sale aren’t known. 

Greystar is also in talks to buy Metropolitan Thames Valley’s minority stake in Fizzy’s real estate portfolio of nearly 1,000 homes across London, which is separate from the operational business, the person said. The Abu Dhabi Investment Authority owns the rest of the firm’s properties. 

Spokespeople for Greystar and Metropolitan Thames Valley declined to comment. A spokesperson for Fizzy Living didn’t respond to a request for comment. 

Investor interest in U.K.’s rental housing is surging as a lack of new homes and soaring house prices keep families and younger people renting for longer. The professionally-managed rental sector emerged as a rare real-estate bright spot during the pandemic as enforced lockdowns punished retail values and emptied offices around the world. 

Australian bank Macquarie Group Ltd. announced in June the creation of a new business that plans to invest over 1 billion pounds ($1.4 billion) in the U.K. multi-family housing sector. Lloyds Banking Group Plc, the country’s largest mortgage lender, aims to become a major player in the sector by targeting the purchase of 50,000 homes over the next decade, the Financial Times reported.

Thames Valley Housing -- which merged with Metropolitan in 2018 -- previously entered talks to sell its Fizzy management company and its minority stake in the company’s apartment portfolio to British Land Co., property news service EG reported at the time. That deal subsequently collapsed the following year.

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