John Laing Group and Macquarie Capital, two big investors in British Infrastructure have set up Brigid Investments, a retirement living platform, to address the undersupply of rental homes for the elderly. The houses will be built and managed by McCarthy Stone, the biggest UK Developer of Retirement Homes.
At present, there are about 12.2m over 65-year-olds in the UK, with that number expected to rise to 17.4m by 2043.
Initially, 250 homes will be built, valued at £80m and the two investors will each hold a 50% stake in the venture, with the agreement to buy a further 400 completed and let homes, worth about £120m over the next year.
Ben Loomes, chief executive of John Laing Group, said that the retirement living market was underpinned by “an ageing population and low supply” and the investment would bring “inflation-linked revenues and strong cash yield from the outset”.
“There is potential for significant value creation both through scaling the platform and as the sector matures and attracts further institutional capital,” he added.
The UK’s retirement housing market is dominated by homes for sale, in contrast to the US and Australia, where renting is far more common. “We’re beginning to see that happening in the UK,” Loomes said.
“We expect more deals to build investment platforms over the next 12 to 18 months in areas including energy transition and decarbonisation of transport,” analysts at Peel Hunt said.