Metropolitan Thames Valley sells £400m build-to-rent arm
Metropolitan Thames Valley Housing Association (MTVH) has sold its build-to-rent developing arm to US real estate company Greystar for £400m.
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Greystar confirmed the acquisition of Fizzy Living, MTVH’s build-to-rent division, which will see it take over the management of the portfolio.This comprises eight London assets and nearly 1,000 operational homes.
Greystar manages and operates approximately $230bn (£173bn) of real estate in 215 markets globally.
The American company will keep the Fizzy Living brand and more than 30 Fizzy employees will move over.
MTVH, which manages around 57,000 homes across London and the South East, previously indicated in 2018 that it would look to exit its remaining stake in the PRS subsidiary, while its joint venture partner Abu Dhabi Investment Authority (ADIA), which had invested £400m, would retain its share.
That had followed reports that British Land was in conversation to acquire the association’s portion – however, the discussions later fell through.
Through the transaction with Greystar, the wholly-owned subsidiary of ADIA has retained its stake in Fizzy.
MTVH has said that Fizzy Living was the first professionally managed, branded build-to-rent service of its kind in the UK when it launched in 2012.
Over the next five years, MTVH plans to build a further 5,000 new homes, of which the “vast majority” will be for affordable rent or shared ownership.
The housing association also said it is making “significant investments” in improving existing stock, in response to building safety requirements.
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New MTVH homes will meet at least Energy Performance Certificate (EPC) Band B and 75 per cent of its existing homes will be upgraded to meet a minimum of EPC Band C by 2026.
Geeta Nanda, chief executive of MTVH, said: “Housing associations have always been at the forefront of innovation, going into markets and locations others don’t.
“We are extremely proud to have continued that tradition by pioneering a new approach towards the build-to-rent market with Fizzy Living.
“When we established Fizzy nearly a decade ago, it was the UK’s first true build-to-rent brand, offering much-needed rental housing to the city’s young professionals.
“Not only has it helped provide homes, Fizzy has also spurred institutional investment into the UK through launching and establishing build to rent as an asset class.”
“Now that the whole build-to-rent sector is firmly established in the UK, with roughly £45bn of committed capital, this is the right moment to relinquish our remaining stake.
“Metropolitan Thames Valley Housing has always had an exit strategy for our investment in Fizzy, and Greystar is the right exit partner and we look forward to seeing them take the Fizzy brand to the next level.”
The acquisition of Fizzy Living increases Greystar’s presence in London, adding a total of 974 units to its portfolio.
Savills Capital Advisors acted as an advisor to MTVH on the sale.
Ralph Watson, director at Savills Capital Advisors, said: “Fizzy Living is one of London’s market-leading multifamily platforms, with an exceptional brand and an irreplaceable property portfolio. It was a pleasure to work with MTVH on this transaction.”
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