Related Cos. has extended its considerable reach by acquiring a 50% stake in Pocket, a leading developer of homes for first-time buyers in London.
One of the largest owners and developers of affordable housing in the United States, Related’s strategic investment in Pocket marks the first transaction of its kind, where a U.S. real estate firm has invested in the U.K.’s affordable housing market to help working people into home ownership, according to the company.
Pocket builds compact one-bedroom homes for first-time buyers at a discount of at least 20% to the open market. The homes are reserved for those that earn less than the Greater London Authority’s income cap for affordable housing, live or work in the borough of the development, and don’t own another property. As demand for affordable homes skyrockets, Pocket has doubled its pipeline year-on-year since 2013 and will aim to complete 4,000 homes by 2023.
Related is one of America’s most prominent real estate firms, developing mixed-use, residential, retail, office, and affordable properties. It owns and operates a premier portfolio of global assets valued at over $20 billion. Last year, Related created a partnership with Argent, one of the U.K.’s leading mixed-use developers. Through this transaction, Pocket and Argent Related will become strategically affiliated.
“I founded Related Cos. in 1972 with a focus on developing, operating, and preserving affordable housing across the United States and it remains at the core of our diversified company today,” said Stephen Ross, chairman, in a statement. “Great cities must provide housing for the full range of its workforce and we believe Pocket provides a smart solution—well-designed, quality-built, affordable housing in the parts of London where its knowledge workers want to live and work. Marc Vlessing and Paul Harbard have created a great company and culture and we look forward to helping them grow.”
Affordable housing laid the foundation for Related, which has developed or acquired over 55,000 affordable homes in the United States.
Vlessing, co-founder and CEO of Pocket, called the transaction “a huge vote of confidence in Pocket."
“Our aspiration is to help ordinary hard-working Londoners into long term affordable housing,” Vlessing said. “There is currently no end to the demand for our product, and with Related’s support, we believe that we can deliver access to a wider range of for-sale and rental homes for this valuable audience.”
The transaction comes at a time when Prime Minister David Cameron and the government have launched new efforts to assist first-time homebuyers, according to Vlessing.