The deal has been done by Moorfield Group, a real estate private equity fund manager acting on behalf of Moorfield and will see the show homes immediately leased back to Avant Homes on an average three-year term.
On expiry of the individual leases, Moorfield will either sell the homes on the open market, leveraging Avant Homes’ sales channels, or rent the homes to complement its existing build-to-rent activities.
The investment, one of the largest ever of its type in the UK.
This is not the first deal done between the two firms with Moorfield having previously acquired the developer’s Edinburgh city centre £750 million mixed-use Quartermile scheme in 2013 for an undisclosed sum. Both parties see this latest deal as paving the way for further strategic partnerships.
Avant has extensive operations in the Yorkshire area and has a turnover of £483 million.
Charles Ferguson-Davie, Chief Investment Officer of Moorfield Group, said: “Despite the volatility caused by the COVID-19 pandemic, we remain convinced that the residential sector will continue to be a resilient asset class, providing ongoing opportunities to generate outperformance on behalf of our investors. We have pioneered investment into a range of residential use classes and this innovative transaction provides our investors with further diversification.”
Avant Homes chief operating officer, Mark Mitchell, said: “This is an excellent transaction for both businesses. We are very pleased to be working with Moorfield Group, having begun discussions at the start of this year.
“COVID-19 has presented the housebuilding industry with many challenges, which we have responded to dynamically, with the safety and wellbeing of our people as our first priority.
“Looking ahead, we remain committed to continuing to execute against our growth strategy, underpinned by the resilience and agility of our business, the excellence of our product and the commitment of our people.”