Grainger plc, the UK’s largest listed residential landlord with 9,109 operational rental homes and a further 8,851 in its £2.1bn pipeline, has acquired The Forge, a stabilised income producing Build-to-Rent (“BTR”) asset comprising 283 rental apartments and a ground floor commercial unit via a corporate acquisition for c.£57m from Moorfield Real Estate Fund III.

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This is Grainger’s first purpose built, BTR investment in its home city of Newcastle, where the company was established in 1912 and remains headquartered. Newcastle meets with Grainger’s investment criteria as a target city in its national BTR and PRS growth strategy.

The Forge, completed in 2019, is the only stabilised BTR asset in Newcastle. In addition to the 283 residential apartments and commercial unit, the scheme offers 3,500 sq.ft of high-quality resident amenity space, including an onsite gym, residents lounge and flexible co-working spaces.

The asset is very well located on Forth Banks in the city centre, with a WalkScore of 91, described as a ‘walker’s paradise’, with a wide range of amenities, local services and public transport links nearby. 

Today’s acquisition is in line with Grainger’s stated investment strategy. Stabilised acquisitions, such as today’s transaction, are one of three investment routes that Grainger employs, alongside forward funding developments and direct development. Opportunities for stabilised acquisitions, which are attractive because they deliver immediate income and accelerate Grainger’s growth strategy, are however limited due to the relative immaturity of the institutional rental market in the UK and often do not meet Grainger’s investment criteria, including ESG standards.

Moorfield was advised by Knight Frank and Shoosmiths. Grainger was advised by Womble Bond Dickinson.

Helen Gordon, Chief Executive of Grainger, said:

“We are very pleased to have acquired a stabilised build-to-rent opportunity that meets Grainger’s high standards and is located in our home city of Newcastle. The Forge is proven as a great place to live, and, provides us with immediate rental income, further boosting our ambitious growth plans.”

Marc Gilbard, Chief Executive Officer at Moorfield Group, commented:

“We are proud to have delivered a benchmark for quality BTR in Newcastle. The asset has performed well for our investors since its completion in 2019 and the timing of this disposal in line with our investment fund’s value-add strategy. We continue to believe in the structural drivers underpinning the UK residential for rent market, where we have been at the vanguard of its evolution and where we continue to explore new and compelling initiatives.”

Nick Pleydell-Bouverie, Head of Residential Capital Markets at Knight Frank, added: “As one of the first purpose-designed and stabilised Build to Rent assets to have traded in the UK market, The Forge represents a landmark transaction for the sector. The weight of both domestic and overseas capital seeking to invest in high-quality product continues to accelerate. This demand is being driven by the sector’s recent strong operational performance, which was achieved despite Covid-19 and the multiple lockdowns that have taken place over the last 12 months.”

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