LeFrak considers joint venture with Chelsfield in Homes and Communites Agency initiative
LeFrak, one of the biggest property companies in America, is talking to UK developer Chelsfield about a joint investment in the government’s private rented initiative, Building understands.
The initiative is intended to attract private finance to the private rental sector. Asset management firm Aviva Investors has already expressed an interest in the programme in collaboration with CB Richard Ellis; Legal & General is also reported to be in talks.
The programme, which is being run by the Homes and Communities Agency (HCA), seeks to encourage funds to invest in residential rental property using incentives such as rental guarantees or discounted government land. It is hoping to generate £1bn of investment.
LeFrak has previously linked up with Chelsfield for an aborted attempt to build out the £1.5bn Elephant & Castle regeneration scheme in south London.
Chelsfield is a partnership between Elliott Bernerd, the company’s founder, and Sir Stuart Lipton, the founder of Stanhope.
The HCA has been seeking funds of at least £1bn to invest in residential rental property
Three separate sources said LeFrak and Chelsfield were working together; however, neither was available to comment.
The HCA is due to give an update on the progress of the initiative in the next few weeks. It is understood that between three and five consortiums will be asked to take forward plans.
The HCA has not received Treasury approval to offer initial rental guarantees because of concerns it might breach EU state aid rules. However, a source close to the initiative said the issue would not hold up progress.
He said: “Most bidders are more interested in other help, such as the ability to build on government-owned land.”