BMO Real Estate Partners invests £40m for Liverpool BTR scheme

The BMO UK Housing Fund has completed the acquisition of the Hughes House scheme in Liverpool city centre through a £40m forward funding agreement, signalling the fund’s first round of deployment.


Located on London Road and within walking distance of the Royal University of Liverpool Hospital, Liverpool John Moores University, and The University of Liverpool, the scheme sits within the local regeneration and employment initiative known as the Knowledge Quarter and Fabric District.

Home Group Developments sourced the project and is the main developer working with UK Land and Property and Equans (part of ENGIE Group) to build out the scheme.

Once completed, the 258-unit project will comprise 144 one-bedroom, 99 two-bedroom, and 15 studio apartments and will operate Home Group’s flexible rent leasing mechanism, which provides a mix of market and discounted rent units.

Allsop supported the transaction, while CBRE handled the valuation.

Peter Lowe, fund manager at BMO Real Estate Partners, the investment adviser to the fund, said: “This acquisition provides us with an opportunity to support the delivery of affordable private rental housing in Liverpool, while also generating sustainable, inflation-linked, long-term income returns for investors. 

“The scheme will enable us to satisfy local demand, particularly from key workers employed within the local authority, city centre hospitals, and nearby universities. 

“We expect to follow up this acquisition with a further pipeline of near-term opportunities as we continue to support the delivery of affordable housing solutions across the UK.”

The objective of the open-ended fund is to innovate and improve the UK PRS and become a trusted partner of its stakeholders, such as investors (including Big Society Capital and Swansea LGPS), residents, partners, local authorities and communities.

Having been seeded by BMO Real Estate Partners and Home Group, the fund is targeting a 6%-plus return and an approximately 4.5% annual distribution yield.

Richard Kirby, head of UK at BMO Real Estate Partners, added: “We’re proud to utilise our responsible investment credentials in partnership with Home Group to promote private capital’s role in delivering and operating long-term rental properties for local key workers. 

“It is also important that, while this fund has clear social objectives, it aligns to our philosophy of creating sustainable real estate by also prioritising environmental considerations and promoting sustainable living, ultimately creating thriving communities for the long term and supporting income generation for our clients.”

Wren Laing, investment director at Big Society Capital, commented: “The current failings of the PRS are widely documented: unaffordability, poor quality, and insecurity of tenure — to name just a few. 

“An essential part of solving the housing crisis is tackling the problems experienced by tenants and improving the quality and range of choice of housing options available to people living in the PRS. 

“The flexible rent model has the potential to contribute to this through the delivery of new professionally managed affordable rental homes, expanding the current build-to-rent offering to a wider market. 

"Social impact investment seeks to connect capital with social sector organisations achieving impact; this strategy brings together a unique partnership between BMO Real Estate Partners and Home Group, a housing association with a strong social mission and demonstrated track record of delivering affordable homes and tests an innovative and impactful housing rental model.”

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