The pan-European property investment and asset management specialist — which is part of Canada’s BMO Financial Group’s £216bn global asset management business — will aim for a circa 6% return and 4.5% annual distribution yield through the provision of mid-market rental homes via the fund.
BMO REP is launching the fund to take advantage of immediate opportunities within its circa £250m investment pipeline.
It plans to deliver a core, inflation-linked, income-focused portfolio, which will be underpinned by an ESG Impact Policy, overseen by an independent advisory group.
BMO REP will work alongside housing provider Home Group and hopes to offer sustainable, community-based rental property, targeted at low- to middle-income households.
“This fund enables us to provide a much-needed housing solution … while generating sustainable, inflation-linked, long-term income returns for investors,” said Angus Henderson, head of business development at BMO REP (pictured above).
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“To achieve this, Home Group was very carefully selected as BMO REP’s development and operating partner thanks to its long-term track record and deep-seated experience in building and managing large-scale housing solutions, with an emphasis on improving the private rented sector with a management responsible approach.”
Mark Henderson, CEO at Home Group, added: “As a country, we aren’t going to be able to build the homes we need without innovative approaches.
“A larger, professionally managed private rented sector will have a positive impact in driving up standards.
“Making private renting better is crucial to ensuring everyone has a safe and affordable home to live in.”
Anna Shiel, head of origination at Big Society Capital, stated that an essential part of the solution to tackling the housing crisis was to look at the problems experienced by tenants and improving the quality and number of housing options available to people living in the private rented sector.
Big Society Capital engages with investors, fund managers, social enterprises and charities, to make it easier to use social investment.