Press Release

Hearthstone Residential Fund 1 (HRF1) to acquire portfolio of houses and flats from Bovis Peer LLP

July 2, 2018
  • HRF1 makes its first investments in North Eastern England and Wales

Hearthstone Investment Management Limited, a residential property (PRS) institutional investment manager, has announced it has exchanged contracts with Bovis Peer LLP for the purchase of a portfolio of 34 houses and a low-rise block of 19 flats for £7 million. The assets will be acquired by HRF1, a ten-year closed-end private equity vehicle investing into the private rented sector in UK regions.

The acquisition also represents the fund’s first anchor investments in North Eastern England[1] and Wales. The houses are situated in Doncaster, Hull, Nottingham, Wakefield and Wigan, in areas where there is solid rental demand and good local infrastructure, but where there is a lack of suitable quality rented housing stock. The properties comprise a mix of two to four bed residences in five separate clusters.

The flats form a complete low-rise block and are located in Cardiff Bay, a new and developing suburb of the city with a wide variety of local amenities and excellent access to the city centre and beyond.

Andrew Smith, Partner and Chief Investment Officer, Hearthstone Investment Management explained, “While this is an investment portfolio of modern Bovis Homes-built properties, they are already tenanted and are therefore income-producing. More specifically, the houses are located in higher yielding areas which will help the fund to achieve its stated income objectives.”

Richard Otten, Partner and Director of Asset Management, Hearthstone Investment Management commented, “This latest acquisition is particularly attractive as portfolios of good quality, modern stock are rarely available. We believe that with some targeted improvement expenditure, we will add value to the portfolio.”

Advising the vendor is Davis and Partners LLP while Charles Russell Speechlys LLP is advising HRF1.

HRF1 is advised by Hearthstone Investment Management Limited, a 50:50 joint venture between the senior management team and Hearthstone Investments Plc. Five local authority pension funds, including the Derbyshire Pension Fund, Nottinghamshire Local Government Pension Fund, Staffordshire Pension Fund, Teesside Pension Fund and West Midlands Pension Fund together with the HRF1’s senior management team, comprise the group of cornerstone investors.

[1] The regional definition of North Eastern England used for HRF1 includes Northumberland, County Durham, Tyne and Wear, West Yorkshire, North Yorkshire, South Yorkshire, East Yorkshire and The Humber.

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