Schroders prepares resi move

Published 07th Dec 2011

Fund manager Schroders is planning a move into key worker housing.

Head of property William Hill said at a briefing this morning that Schroders was in talks with local authorities and affordable housing providers about a number of intermediate residential opportunities in greater London.

Any investments will be made through Schroders' Real Income Fund, which counts several local authorities among its investors.

Local authorities would contribute the land, while the Schroders fund would finance the housing development.

The homes would be rented to key workers for an agreed period, likely to be up to 15 years, and then sold vacant to the open market.

"Above an agreed hurdle rate, the surplus from those sales would be shared by the local authority and the fund," Hill said.

Schroders believes such investments could deliver returns of 5% as opposed to 3% from mainstream private rented housing.

Hill added that institutions would continue to be put off from investing in the private rented sector because the residential market was fundamentally over-priced.

Source: ' Egi '

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