UK pension scheme Nest has partnered with financial services firm Legal & General (L&G) and Dutch pension fund service provider PGGM to collectively invest up to £1 billion (US$1.3 billion) in “high-quality” UK rental properties. The group has committed an initial £350 million into the country’s Build to Rent schemes, with plans to scale up their financing commitment over time. The commitment will help to address sustained demand for high-quality rental housing, meeting the government’s target of delivering 1.5 million more homes. “We can see there’s a critical shortage of housing supply, coupled with increasing demand for high-quality rental homes,” said Elizabeth Fernando, Nest’s Chief Investment Officer. “By building more properties, we can extend to our members a great investment opportunity while helping to meet this demand and bolster the rental market.” L&G and PGGM have been investing together in the UK Build to Rent scheme through a joint venture called the Access Development Partnership (ADP), which was launched in 2016 to expedite the delivery of high-quality rental homes across the country, while delivering stable returns for institutional investors. “With an inherent supply and demand imbalance, there is a big gap to fill – and thus a need to drive up the delivery of all homes, across all tenures,” said António Simões, Group Chief Executive Officer at L&G. “Institutional investment has an important role to play, and we expect investor demand in the UK’s Build to Rent sector to continue to grow.” L&G has so far deployed over £3 billion into the Build to Rent sector – the equivalent of more than 10,000 rental homes. “This investment not only generates stable financial returns for our client PFZW, the Dutch pension scheme for healthcare workers, but it also contributes to relieve a stressed housing market which poses a huge challenge to key workers.”
