KCR Residential REIT has established a strategic relationship with Inland Homes, the brownfield regeneration specialist and house builder with a focus on the South and South-East of England, to support the delivery of high-quality, low-to-mid-priced housing for rent.
As part of the agreement, Inland and KCR have identified an initial pipeline valued in excess of £100 million ($132.8 million) from within Inland’s current portfolio, comprising investment properties, units under construction and land with planning consent. Through these transactions, Inland intends to build a long-term minority shareholding in KCR, providing Inland with exposure to the U.K.’s fast-growing private rented sector
Agreement highlights include:
- KCR has the right of first refusal over the initial identified pipeline of Inland assets
- Access to this initial pipeline will significantly accelerate the development of KCR’s residential property portfolio
- As well as the purchase of investment properties and units under construction, KCR may acquire parcels of consented residential land with a simultaneous, fixed-priced construction contract being awarded to Inland. This will provide Inland with early realizations and cash flow and give KCR increased visibility over a longer-term pipeline of assets
- Following the sale of an asset to KCR, Inland will have first right of refusal to undertake any associated construction contract, using its rapidly growing partnership housing business
- On identification of additional portfolios suitable for the strategic relationship, Inland will not dispose of such assets without first affording KCR a three-month period to evaluate the investment opportunity and agree heads of terms
- It is likely that KCR will acquire assets using a combination of cash and equity
The agreement supports KCR’s investment strategy of building a low- to mid-priced residential rental portfolio focused on city and town centers across the United Kingdom and provides a platform for Inland and KCR to establish a long-term, mutually beneficial relationship.
