Pricoa Mortgage Capital aims to boost presence in UK PRS
Mon 09 Feb 2015
Pricoa Mortgage Capital has confirmed it intends to establish a stronger presence in the UK's private rented sector (PRS).
The US-based investment firm has been active in the commercial property market since 2012, but recently moved into the PRS courtesy of a deal with Fizzy - the first dedicated housing association PRS structure in the UK.
Pricoa has signed a £32.4 million debt package with the organisation at a rate of less than three per cent.
Geeta Nanda, director of Fizzy and chief executive of TVH - which owns the Fizzy Enterprises joint venture parent entity with Silver Arrow - said this shows its model is "extremely attractive" both to equity and third party debt investors.
Aaron Knight, director of European debt originations at Pricoa Mortgage Capital, added that the Fizzy portfolio offers a number of attractive qualities, including good locations, quality assets and stellar sponsorship.
As a result, Pricoa is keen to expand its presence in this space and strengthen its relationship with Fizzy.
Julian Turner, deputy finance director and head of treasury at TVH, noted that investors are being drawn towards Fizzy because it offers "a defined proposition and branded product".
Furthermore, he said the operating model is important to the senior debt provider as they must be sure enough income will be generated to cover interest payments.
Mr Turner added that on one hand, Fizzy has been able to free up £32.4 million, but at the same time it "provides the confidence to say the model works end to end, enabling more capital for future delivery".
The investment by Pricoa in Fizzy Living is good news, according to James Duncan, Real Estate Investment Partner at Winckworth Sherwood. He commented: "Another substantial US investment shows the confidence of experienced investors in the PRS model in the UK."
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