DTZ Investors forward fund £70m for The Collective Earlsfield

DTZ Investors has forward funded a 310 room Build to Rent scheme for its coliving fund - in a deal requiring c.£70m of total investment.

The Collective Earlsfield exterior view - DTZ Investors | BTR News
The Collective Earlsfield - exterior view.

DTZ Investors has forward funded £70m for The Collective Earlsfield. The Collective, which is the fund’s property and asset manager, will build-out and operate a 310 room Build to Rent development on Trewint Street, in the London Borough of Wandsworth. When completed, it will be the second asset in the fund following the forward-funding of The Collective Harrow, which was announced when the fund launched in October last year.

The development will be funded with a mixture of equity, drawn down from the fund, and debt, which will be provided by alternative asset manager – Cheyne Capital.

“We launched our coliving fund last year with the aim of providing high quality, flexible and socially responsible housing in London. The development we are announcing today at Trewint Street in Earlsfield is a fine example of that aim. 

“We want to have an impact beyond the four walls of our real estate by connecting with our local communities and promoting better health and well-being for our residents. The Collective Earlsfield will provide 35% onsite affordable housing targeted at key workers. The extensive indoor and outdoor communal spaces help to knit the community together and combat loneliness. A bespoke Community Investment Plan has been agreed with The Collective and the Local Authority. Together, we will work with local charities to give back to the causes that matter most to the community.”

Chris Cooper, Chief Executive Officer, DTZ Investors

Strong alignment to ESG objectives

The fund is committed to achieving sustainable housing solutions, which foster a diverse and supportive community, promoting health and wellbeing while delivering value for money for coliving residents.

The Collective Earlsfield will achieve BREEAM Excellent certification, reflecting its ambition to contribute to sustainable housing solutions for London. More than a quarter of the 120,000 sq ft development will be dedicated to resident amenities – which will include a café, coworking space, events space, a communal dining and kitchen area, cinema room, laundry facilities, shared lounges and a library. 

Outdoor spaces adjacent to the River Wandle will encourage residents to spend more time outside, and a gym and studio space will facilitate health and wellbeing focused events. 35% of the rooms will be affordable housing at discount market rent. There will also be five rooms reserved for young people leaving foster care in the borough – which will be at significant discounts to local market rents.

A Community Investment Plan led by The Collective will also be put in place during the development period – which will identify a number of charities and social groups in the local area that the fund will work with to help resolve issues that are important to the local community.

“We are excited to progress The Collective Earlsfield through to construction in partnership with DTZ Investors under the COLIV fund. We’ve been impressed with the proactive approach taken by Wandsworth Council to unlock the delivery of this project. The coliving asset class is demonstrating its resilience in the context of the Covid-19 pandemic and the current economic climate, and we remain focused on delivering our pipeline of projects in the UK and across continental Europe and the US.” 

Reza Merchant, Chief Executive Officer and Founder, The Collective

The Collective Earlsfield is less than five minutes walk from Earlsfield Station – which provides mainline trains into London Waterloo in around 13 minutes. The adjacent River Wandle and Wandle Trail is a cycle and pedestrian only route that follows the River Wandle from its mouth at the River Thames in Wandsworth – through three boroughs – to Croydon.

COLIV momentum

This latest deal follows the launch of the fund, the world’s first institutional coliving investment vehicle, in October 2019, by DTZ Investors. It aims to raise total equity commitments of up to £650m and to acquire – or forward fund – between six and ten coliving assets in London, with a target gross asset value of £1bn across the life of the fund. 

The first acquisition was The Collective Harrow in Q4 last year. In July 2020, DTZ Investors announced that Merseyside Pension fund had joined other investors, including the Strathclyde Pension Fund, in investing. Building on this momentum, the fund is targeting further deals before the end of the year. 

“We are pleased to be supporting this exciting coliving project in Earlsfield, which fits well with our thesis of originating investment opportunities in value-add or development assets in attractive locations, in partnership with high-quality borrowers with whom we can form a long-term relationship. 

“This latest activity by DTZ Investors demonstrates the growing institutional demand for the coliving sector, which we believe offers a compelling risk/reward dynamic for investors today.”

Richard Howe, Cheyne Capital