Canada Pension Plan Investment Board (CPP Investments) has partnered with global real estate investment company Kennedy Wilson to launch a new single-family rental housing joint venture in the United Kingdom.
CPP Investments will initially commit £500 million, with Kennedy Wilson committing £56 million.
The JV will have an initial target of approximately £1 billion of asset value, including leverage, with the potential to commit further capital depending on market opportunities.
CPP Investments will hold 90% of the venture and Kennedy Wilson will hold a 10% ownership interest moving forward.
ENERGY EFFICIENT
Through partnerships with housebuilders, the JV will target energy efficient, new-build housing stock in strong and growing local economies that offer residents excellent connectivity, 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, where Kennedy Wilson is now leasing up the first phase of completed homes, and units by Miller Homes (main picture) in Stevenage, which will deliver completed houses from Q2 2025. Kennedy Wilson has an active pipeline of opportunities totaling over £360 million and 1,100 units, with the capacity to reach 4,000 units at full capital deployment.
HIGH QUALITY
Tom Jackson, Head of Real Estate Europe at CPP Investments, says: “Private capital can play an important role in addressing the current undersupply of high-quality rental housing in the UK, particularly where it is professionally managed to provide a great customer experience.
“Investing into the UK single-family housing sector aligns well with our broader real estate strategy, to undertake scalable investments into high quality assets with growing cash flows.”
Kennedy Wilson will manage the JV and earn customary fees, leveraging its expertise as a long-term owner, operator, and debt provider for rental housing with more than 60,000 units owned or financed by Kennedy Wilson managed platforms across the United States, the UK and Ireland.
CRUCIAL FOR FAMILIES
Mike Pegler, President, Kennedy Wilson Europe, says: “Residential has long been a crucial part of Kennedy Wilson’s investment strategy, and our JV with CPP Investments, a leading global institutional investor, will propel our efforts to deliver much-needed rental homes for local families.
“The structural challenges facing institutionally managed rental housing in the UK provides a clear investment rationale to enter the market and leverage our deep experience in the sector. We are actively seeking opportunities to grow our portfolio, which offers substantial scalability potential in the UK, driving consistent risk adjusted returns in this high-conviction subsector.”
