Property developer and operator Strawberry Star Group has expanded, launching its dedicated built-to-rent (BTR) arm, Star Living.
Star Living hopes to provide a modern and convenient rental product within the commuter belt against a background of chronic supply issues, whilst serving investors as a resilient asset class poised for growth.
Star Living’s first scheme will be at its Harlow development in Essex, with phase one being block of 163 residential units with a gross development value (GDV) of £45 million, due to start construction this year.
An existing Strawberry Star site, Lu2on in Bedfordshire, is soon set to launch phase two comprised of 564 BTR units with an estimated GDV of £160m.
Strawberry Star Group aim to have a portfolio within London commuter towns with a target of £1 billion GDV by 2027.
Chairman of Strawberry Star, Santhosh Gowda, said: “Our vision for Strawberry Star’s Star Living arm is to be the leading income-generating, diversified and scalable BTR investment platform through our unique, cost-efficient, build and operational expertise. We aim to be one of the largest BTR providers in the commuter belt by 2027.
“Star Living brings together our existing skillsets as an end-to-end provider combined with a panel of leading contractors and consultants for significant placemaking schemes that benefit each local community.
“With a strong pipeline of new Star Living sites due to launch in the next 12 months, we are one of the few developers responding in volume to the current supply crisis. We are focusing on commuter growth towns with a high proportion of young professionals and a low supply of rental properties, aiming to help redress the balance which is causing upwards pressure on rental values.
“More choice and better supply will be a huge advantage to those now spending increasing time at home with flexible working here to stay, as BTR products are in a much better position to meet future needs and live-work trends.”
The firm has already tested out market appetite for BTR at their flagship Lu2on scheme in Bedfordshire, having recently completed on its first phase of 401 units, with one of the three finished blocks dedicated to buy-to-let rental homes only. 65 per cent of the 135 rental units have already been rented within the last 3 months of completion. Luton represents a key growing commuter hub for Strawberry Star, indicative of the future sites Star Living will target.
Mr Gowda continued: “Our Lu2on scheme has proven exceptionally popular with tenants, carving out a brand-new rental market for this product type. It’s the perfect location for commuting young professionals, with infrastructure improvements like the new DART train enhancing its appeal. Our proven track record of success here will support our transition into full BTR with a model based on both performance and customer satisfaction.
“2022 is without a doubt the year of BTR, providing an obvious solution to this highly pressurised market. Last year saw a near 80 per cent increase of capital invested into the sector compared to 2020, so it’s not unreasonable to suggest investment could triple as we edge towards 2023, having shown incredibly strong resilience during an unpredictable year for the UK economy.”
Star Living Harlow is due to be complete in 2024 and will eventually provide over 163 new homes.
Image source: Strawberry Star
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