Aberdeen Standard Investments (ASI) has shown confidence in the Scottish residential property by acquiring a new-build block in Edinburgh for £27.5 million.
It has bought Lochrin Quay, a 113-unit residential block in the Scottish capital close to the city’s Exchange business district from GSA, a property company in the private rental and student accommodation sector. It offers a range of accommodation including studios and one, two and four-bedroom apartments, and is already 80 per cent occupied.
This is the first investment in the residential property market north of the border by the recently merged ASI group. ASI said that the private rental residential market is a growth area so there is potential for future investments in this sector in Scotland. It added that it would consider other acquisitions or getting involved at an earlier stage in speculative developments.
Separately, ASI’s UK PRS Opportunities 1 Fund has committed £17.25m for the development of a new 107-unit residential scheme in Leeds providing high quality rental accommodation.
This investment will be the second asset for UK PRS Opportunities 1, which was launched in 2016 to focus on large investments in the private rented sector across the UK, including income-producing assets and development opportunities.
The two transactions totalling around £44m bring ASI’s residential assets under management in the UK to more than £700 million, across 12 funds.
ASI said that the UK’s growing private rented sector offers a good long-term investment for clients.
Ed Crockett, fund manager at Aberdeen Standard Investments, said: “These deals reinforce our long-standing commitment to the private rented sector in the UK, where we continue to target high quality housing stock in key cities.
“The UK market is currently worth more than £1 trillion and is set to grow with an anticipated 24% increase in private renting by 2022. With its secure long-term rental income streams, residential property is a compelling opportunity for investors.”
ASI’s current UK residential portfolio includes more than 800 private rented units and nearly 6,000 student rooms. This complements a European portfolio of 9,000 properties with a total value of €6 billion (£5.3bn).
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