Regeneration specialist Urban Splash is seeking £100m in a fresh round of fundraising to bolster its PRS portfolio.
It is targeting new and existing institutional investors and high net worths with the Urban Splash UK Residential Fund, to support delivery of a further 500 homes.
Urban Splash unveiled the fund last year, raising £20m in seed funding, with founding investors including Paul Gough of Star Capital. The fund allowed it to diversify into the private rented sector, and it was the first time Urban Splash had brought outside investment into its portfolio.
Former UBS analyst Akeel Malik leads the business, with Mariana Investment Partners as the alternative investment fund manager and John Forbes as independent chair.
The seed portfolio includes 160 homes over six different schemes across the country including flats at Park Hill in Sheffield, Lakeshore in Bristol, Lister Mill in Bradford (pictured), and modular houses at Irwell Riverside in Manchester and Port Loop in Birmingham. The fund targets an IRR of 10% including dividends of 3% per annum.
This has grown to include homes in Urban Splash’s development pipeline, at the landmark Port Loop scheme in Birmingham and the Copper Building in Bristol.
US Residential Fund has a focus on PRS, but also invests in properties that can be sold on the market. At the end of last year it reported a 12% return, with a 3% dividend and 9% capital gain, as well as 94% average occupancy across the portfolio.
Tom Bloxham MBE, chairman at Urban Splash, said the new fundraise was “the next chapter in our exciting PRS journey”.
He said: “We have spent time with our existing investors and most have chosen to invest more capital, and we opted to reach out to new investors.”
Bloxham noted difficulties launching the fundraise in lockdown. He said: “It has been challenging through Covid-19 to meet new investors. But the income has been really resilient, with occupancy increasing during lockdown.”
Fund manager Akeel Malik added: “Our ambition is to create an institutional-quality UK residential portfolio of scale, vertically integrated with an experienced residential management team – and hopefully leave the world a slightly better place by investing in areas and communities in the process.”
The fund benefits from access to Urban Splash’s development pipeline. In 25 years, Urban Splash has invested over £500m in more than 60 regenerations with 5,000 homes.
It is now seeking to ramp development through its partnerships, including working with Canal and River Trust at Port Loop and a national modular housing drive with Japan’s Sekisui House and Homes England.
Bloxham added: “We are expanding rapidly, acquiring sites in Milton Keynes, Cambridge, Windermere and all over the country, with investments in residential apartments that will make a real difference to the quality of our cities.”
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