UK workplace pension scheme NEST has formed a partnership with Legal & General (L&G) and Dutch pension fund manager PGGM to jointly invest an initial 拢350m (鈧�419m) in the development of rental homes throughout the UK.
The trio鈥檚 new venture, expanding on an existing partnership between L&G and PGGM, expects to invest up to 拢1bn into developing build-to-rent (BTR) schemes across the country.
L&G and PGGM, which invests on behalf of its pension fund client PFZW, have been collaborating on UK BTR through their Access Development Partnership (ADP) founded in 2016. To date, L&G has invested over 拢3bn in the BTR sector, resulting in the delivery of more than 10,000 rental homes.
The latest partnership with NEST is for the second phase of the ADP partnership.
Elizabeth Fernando, NEST鈥檚 CIO, said: 鈥淲e can see there鈥檚 a critical shortage of housing supply, coupled with increasing demand for high quality rental homes. 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.
鈥淎fter working with L&G for many years, we鈥檙e delighted to extend our partnership into this new area. L&G and PGGM have already been successfully investing in UK build-to-rent sites, giving us confidence that this is a tried and tested approach we鈥檒l now be extending to NEST members.
鈥淭his is a great deal for our 13m members and the UK. By also drawing in international investment from PGGM, we鈥檙e amplifying our impact and providing much needed residential properties across the UK.鈥�
Ant贸nio Sim玫es, group CEO of Legal & General said: 鈥淭he launch of ADP in 2016 was the catalyst that has enabled L&G to deliver 10,000 high-quality rental homes across the UK鈥檚 city centres. We鈥檙e therefore delighted to re-capitalise with PGGM and welcome a new co-investor in NEST.
鈥淭hanks to this commitment, we are not only accelerating delivery but also unlocking DC pensions access to the investment opportunity within the residential sector. It鈥檚 a strong step forward in putting pensions to work.鈥�
Dirk Bootsma, senior investment manager of private real estate at PGGM, said: 鈥淭his investment not only generates stable financial returns for our client PFZW, the Dutch pension scheme for healthcare workers, it also contributes to relieve a stressed housing market which poses a huge challenge to key workers.
鈥淔or PFZW, investments in sustainable real estate contribute to reaching its climate impact goal to reduce the equivalent of 15 mega-ton CO2 by 2030 through measurable impact investments.鈥欌��
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