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London’s two largest REITs, which have for the past two decades concentrated on offices and retail, are making their first moves into the build-to-rent sector.
Landsec and British Land are both making moves to become developers of large, mixed-use schemes, rather than focusing on two traditional asset classes. Both are in the process of building new assets outside of their recent home territory and redeveloping existing schemes to include new uses. Rented residential is to the fore in both cases.
British Land is slightly further along, and this week said that a new 136K SF mixed-use building it is developing in Aldgate on the eastern fringe of the city will be residential led, and include 159 “premium” BTR homes. It will also include 19K SF of offices and 8K SF of retail and leisure space.
The building will be the second in British Land’s wider Aldgate Place development. In addition to the build-to-rent apartments being developed at Aldgate Place, British Land will build between 2,000 and 4,000 homes as part of the flexible planning consent secured at Canada Water, its fourth London campus.
Landsec’s move into rented residential will come as part of its redevelopment of a London shopping centre. This week, the company began consultation on plans to redevelop the 243K SF O2 centre in Finchley, north west London.
The plans will see it build around 1,900 new homes, 35% of which it said would be affordable, as well as new shops and leisure facilities, a new park, a community centre and a health centre. It said some of the new homes would be for rent and some for sale, but did not provide a breakdown between the two categories.
Like Landsec, shopping centre REIT Hammerson is converting some of its retail space into BTR homes and debuted the idea at the Highcross scheme in Leicester.
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