The London Pensions Fund Authority (LPFA) and Grainger are backing a private-rented housing project in London.
LFPA has said it will provide 85% of the financing behind the scheme in the east of the city. The consortium was selected alongside developer Bouygues by the Greater London Authority (GLA).
The project, at Pontoon Dock, will provide 200 homes on the site of a car park and coach stand. A total of 137 units will be privately rented, with the remainder a mixture of affordable rent and shared ownership.
Susan Martin, chief executive of LPFA, said investing directly in the redevelopment of the Pontoon Dock site would provide 鈥渁ttractive, liability matching, long-term returns鈥�.
LFPA said the development would use an 鈥渋nnovative covenant鈥� to help relieve pressure on the capital鈥檚 housing market, accelerate development and raise standards of private renting.
Last year, LPFA chairman he was pushing for the creation of a London residential fund and was in 鈥渙ngoing talks鈥� with the GLA.
The number of households privately renting in London has increased to around two million, or one in four, according to LPFA. The GLA used MIPIM, the property sector鈥檚 annual conference in Cannes, to call for investment in housing in March this year.
In 2011, listed developer Grainger, which manages residential funds, and Bouygues revealed they were seeking to create institutional residential funds in the UK.
A survey by The Mill Group found PRS to be increasingly popular with institutional investors. The group鈥檚 third annual survey of institutions foundthat 85% of respondents now invest in PRS, compared with 77% last year. PRS is twice as popular as student accommodation, and seven times more popular than social housing.
