Harwood seeks to capitalise on rental boom with £175m float

HARWOOD Capital, the fund run by JO Hambro founder Christopher Mills, is planning a £175m float of part of its property arm to capitalise on demand for rented homes.

Harwood Real Estate is understood to be considering an initial public offering on the main market in the coming weeks for its private rented sector division, which would make it the first listed company to target pre-built housing units exclusively for renters.

The residential rented sector has expanded enormously in recent years as tenants have sought more professionally managed homes instead of signing leases with private landlords.

Harwood Real Estate is one of a number of companies which have invested in rental properties, and already manages around 2,250 rental homes.

Official statistics suggest that there are around 3.6m households that rent in the UK, a number which could grow by more than a million in the next five years. Harwood’s new listed arm, called the Multifamily Housing REIT, will target buildings in regional towns and cities which are already being used as rental homes, rather than building them itself.

It is understood to be floating with a £70m seed portfolio comprising around 650 homes, and wants to manage properties it can rent to tenants at an affordable rate.

Nick Jopling, a former executive director of housebuilder Grainger, will be the company’s chairman and David Lis, formerly head of equities at Aviva Investors, will also be on the board. Mr Mills co-founded JO Hambro in 1993 with Jamie Hambro. He left the investment company in 2011 when it was bought by Australian firm BT Investment Management, pocketing a share of £124m in the process. JO Hambro boasted £30.8bn of assets under management at the end of June.

Harwood Capital was spun out of JO Hambro in the same year. It was originally incorporated in 2003.

The company now has around £4.5bn of funds under management, according to its website. Its property arm has previously invested in offices, retail and warehouses.

Last year, Mr Mills teamed up with Ian Armitage, the former chief executive of private equity firm Hgcapital, to launch a fund investing in small-cap stocks. Mr Armitage chairs the firm, while Stuart Widdowson was hired from GVQ Investment Management as the fund’s portfolio manager.

GVQ was bought in 2014 by RIT Capital, the £2bn investment trust chaired by Jacob Rothschild, the 4th Baron Rothschild.