Moorfield Group, a renowned UK-focused real estate investment manager, is setting its sights on a significant chunk of the residential-for-rent sector, unveiling plans for a new venture that could reshape the landscape for both investors and renters.

Moorfield’s Ambitious £500m Plan

Moorfield Group’s latest endeavour is a real estate investment trust (REIT) dubbed MREIT. Targeting an impressive £500m investment capacity (approximately €577m), it’s clear that Moorfield is eyeing a substantial stake in the residential rental market. As of now, they’ve already succeeded in raising £100m for this venture.

What MREIT Offers

But what exactly will MREIT be focusing on? Moorfield has announced that their primary aim is the acquisition of both existing and newly-built single-family homes. But they’re not stopping there; student Houses of Multiple Occupation (HMO) are also on their radar.

To give a clearer picture of their intentions, MREIT’s present portfolio holds investments worth £50m, courtesy of Moorfield’s fifth value-add fund. Interestingly, these investments are evenly split between single-family homes and student HMOs.

A New Opportunity for Buy-to-Let Investors

For those buy-to-let investors considering selling, Charles Ferguson Davie, the CIO at Moorfield Group, believes MREIT could be an attractive exit option. He comments, “Our acquisition strategy might be a game-changer for buy-to-let investors eyeing an exit, and even housebuilders who are mulling over bulk sales due to the softening for-sale market.”

Moorfield’s approach with MREIT is strategic; they’re targeting locales with robust demand, especially places where their core demographics – long-term renters and domestic students – are prevalent. The catch, though, is a limited new supply to ensure sustainable rental growth for MREIT.

Davie also adds, “The success of US single-family REITs paints a picture of what the future could look like for UK’s residential-for-rent sector. We’re confident that MREIT is poised to simplify institutional investment in an asset class that has, historically, been a tough nut to crack because of its fragmented ownership.”

Greening the UK’s Built Environment

MREIT isn’t just about profit; it’s also about progress. Sadie Malim, head of special projects, ESG, and legal at Moorfield Group, emphasized MREIT’s commitment to environmental responsibility. “Our focus is on upgrading existing assets to meet modern environmental and management standards. By also acquiring newly-built units, we’re offering institutional investors a chance to play a role in the greening of the UK’s built environment.”

A Long-Term Vision

MREIT’s introduction is about tapping into a consistent, necessity-driven asset class. Marc Gilbard, CEO at Moorfield Group, shed light on their vision, stating, “With MREIT, we’re opening doors for institutional investors to access an asset class that has shown sustainable rental growth, typically in line with inflation. The UK’s residential sector has always been our stronghold. With ongoing demographic shifts and the evident demand-supply imbalance, we see values being upheld and foresee enduring rental growth.”