Swedish private equity firm EQT has agreed to launch a £1bn housing joint venture with listed residential development and regeneration specialist Sigma Capital to deliver new homes for private rental in London.

EQT’s property platform, EQT Real Estate, and Sigma had initially committed equity of £300m and £16m, respectively, to the joint venture. Its initial target is having a portfolio of around 3,000 affordable homes, expected to be built and completed over a period of at least five years, the firm said in a statement.

The new group had launched with the acquisition of five sites from UK homebuilder Countryside Properties expected to deliver 361 homes for a total gross development cost of £102m and include locations in Greater London, such as Ealing, Enfield and Havering.

Two further sites currently under development by Sigma, at Fresh Wharf, Barking, and Beam Park, Havering, would be acquired by the JV on completion.

“In addition to the initial seven schemes, we are currently evaluating a growing pipeline of projects in Greater London to build a large scale, resilient and downside-protected institutional build-to-rent portfolio with robust and diversified rental income,” Peter Shacalis, director at EQT Partners and head of UK, EQT Real Estate, anticipated.

The deal marks the business line’s first real estate investment in the UK and continues the firm’s push to the sector. Established in 2015, EQT Real Estate has advised on over 130 real estate projects in multiple asset classes across Europe, the firm said.

“I cannot think of a more compelling investment opportunity at the moment than to deploy capital into this high conviction strategy, and one that should deliver significant social impact,” Rob Rackind, partner at EQT Partners and head of EQT Real Estate, added.

EQT currently has around €40bn in assets under management in private capital, real assets and credit across 19 active funds. Backed by Sweden’s billionaire Wallenberg family, EQT was founded in 1994 and has grown rapidly in recent years, listing on the Nasdaq Stockholm in September last year.

Recent deals include the acquisition of Spanish online real estate listings platform Idealista from Apax for €1.3bn; and the buyout of a similar business, Casa.it, from Oakley Capital – both announced this month.

Source: Private Equity News

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