McCarthy Stone has secured around £200m in financing for the development of its retirement living rental portfolio from infrastructure investors, John Laing and Macquarie Capital.
The funding, which is provided by Brigid Investments Limited, a special purpose vehicle formed by John Laing and Macquarie Capital, is designed to help meet the under supply of retirement living sites in the UK.
It will finance approximately 250 purpose-built, completed and let retirement units in the UK, worth approximately £80 million with a commitment to finance around a further 400 units in the UK worth approximately £120 million over the next 12 months.
John Tonkiss, Chief Executive of McCarthy Stone, said: “Partnering with experienced and dependable infrastructure investors such as John Laing and Macquarie creates the platform to fund greater expansion of our rental offering and provides the business with a highly sustainable platform for growth. It also proves for the first time the retirement living rental proposition in the UK market.
“Similar investment vehicles were launched by the student housing market, led by Unite, the UK’s leading student housing provider, which led to a similar increase in delivery. Our customers have jumped at the opportunity to rent. It provides greater choice and more flexibility and allows more people to access the benefits of retirement living, which include increased companionship, peace of mind and independence in their later years.”
With the UK market having historically focused on the for-sale model, McCarthy Stone launched a new rental offering for retired tenants with increased flexibility in 2019.
There are currently around 8,000 new retirement units delivered in the UK each year with Knight Frank estimating there is the potential to increase this to around 30,000 units.
In the 2020 financial year, McCarthy Stone completed 265 multi-tenure transactions, and so far in financial year 2021 around a third of its transactions have been for rental properties, illustrating the strong demand and the potential for rental to become a greater share of its business in the future.