The Mill Group has launched the UK鈥檚 first mainstream REIT vehicle, focused on the (PRS).
The London-based firm said the new vehicle would buy companies with existing portfolios of residential properties and aim to attract investment from 鈥渕ainstream鈥� investors.
Simon Phillips, chief executive of the new vehicle, told IP Real Estate the Mill Residential REIT would give shareholders the opportunity to invest without the 鈥渂urdens鈥� of being a residential landlord.
By this time next year, the REIT hopes to have built a portfolio with a gross asset value of around 拢50m (鈧�62.5m), Phillips said.
鈥淧eople have questioned why a residential REIT hasn鈥檛 been done before, and there鈥檚 been a lot of investor interest,鈥� he said. 鈥淧RS is a very attractive market, and it鈥檚 going to grow.鈥�
With an opportunistic and value-added approach, Mill Group will target the south east of England and West Midlands 颅鈥� avoiding prime and central London and focusing on areas of growth.
鈥淲e will look to invest where there is a good combination of infrastructure and employment,鈥� Phillips said.
In the greater London area, the choice facing 鈥済eneration rent鈥� was dominated by commute time as well as quality of stock.
The company has bought an initial portfolio of seven properties 鈥渟ubstantially let and generating income, in desirable locations鈥�.
The assets range in value from 拢180,000 to 拢430,000.
With REITs constrained by limits on the 鈥渃hurn鈥� of properties, Phillips said the vehicle was more aimed at investing with a view to 鈥渓onger-term holds鈥�.
Andrew Smith joined Mill Group as executive director as the company launched its first PRS project in a joint venture with Bovis Homes.
The pair bought 190 new-build homes in the south of the UK for 拢45m.
