Canada Pension Plan Investment Board, Toronto, has partnered with real estate investment company Kennedy Wilson to launch a single-family rental housing joint venture in the U.K., according to a news release.
CPPIB will initially commit £500 million ($652 million), with Kennedy Wilson committing £56 million. The joint venture will have an initial target of about £1 billion in asset value, with the potential to commit further capital depending on market opportunities. CPPIB will hold 90% of the venture and Kennedy Wilson will hold a 10% ownership interest.
The joint venture will look to target energy-efficient, new housing stock in growing local economies that offer residents attractive local amenities, and proximity to strong employment prospects and educational institutions.
The investment program is seeded with properties from two developments sourced by Kennedy Wilson, including units under construction by Barratt Redrow in Norwich, England, where Kennedy Wilson is now leasing the first phase of completed homes, and units by Miller Homes in Stevenage, England, which is projected to deliver completed houses starting in the second quarter of 2025.
Kennedy Wilson has an active pipeline of opportunities totaling more than £360 million and 1,100 units, with the capacity to reach 4,000 units at full capital deployment.
“Private capital can play an important role in addressing the current undersupply of high-quality rental housing in the U.K., particularly where it is professionally managed to provide a great customer experience,” said Thomas Jackson, managing director and head of real estate Europe at CPPIB in the news release. “Investing into the U.K. single-family housing sector aligns well with our broader real estate strategy, to undertake scalable investments into high-quality assets with growing cash flows.”
The U.K. government’s recently elected Labour Party is pledging to build 1.5 million new homes across the country over the next five years.
CPPIB had assets of C$632.3 billion ($466.8 billion) as of March 31.
