Macquarie Targets U.K. Rental Housing With $1.4 Billion Launch

Australian bank Macquarie Group Ltd. is branching into U.K. rental housing with the creation of a new business that’s planning to invest more than 1 billion pounds ($1.4 billion).

The bank’s asset management arm will buy, develop and operate multi-family housing complexes in London and other U.K. cities, according to a statement. The platform, called Goodstone Living, initially plans to raise about 1 billion pounds of debt and equity, said a person familiar with the matter, who asked not to be named because the funding details aren’t public.

Macquarie is joining some of the world’s biggest investors by seeking a slice of a property class that’s proved resilient during the pandemic. A lack of supply and growing demand across Europe has made purpose-built rental housing an attractive bet for money managers seeking stable returns. They bought more apartments in the first quarter than any other property, with deal volumes surging 36% from a year earlier, according to Real Capital Analytics.

“This sector has emerged as a global mega-trend in real estate over the last 10 years, driven by secular trends including urbanization, digitalization and demographic shifts,” said Dana Gibson, chief investment officer and co-head of Macquarie Asset Management’s real estate team in Europe.

Investors are also betting that young professionals will increasingly turn to renting as supply shortages and booming U.K. house prices put home ownership out of reach for many.

The potential for M&A activity is also an attraction of purpose-built rental housing in the U.K., because the sector is less developed than in other markets, said Gibson.

“We think some consolidation would serve the industry well and we’d like to be at the forefront of that,” he said.

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