The Urban Splash Residential Fund, based in Manchester and operating under Urban Splash UK Residential LLP, has reported a promising year up until March 2023. With a 7.4% return for investors and an expanding portfolio, the fund is thriving in a demanding rental market.

Over the past year, the fund has invested £20.8 million in its portfolio. This includes the acquisition of 20 energy-efficient MMC Town Houses in Cambridgeshire and Derwent House, a 40-apartment block in Birmingham’s Jewellery Quarter. These additions have increased the portfolio’s total homes by 22% to 307, resulting in a like-for-like capital uplift of 2.4%.

Despite a challenging economic environment marked by a 3.5% increase in the Bank of England base rate, over 10% CPI inflation, and a 31% negative total return for the FTSE EPRA Nareit UK benchmark, the portfolio has shown resilience. It maintained an average occupancy level of 97%, rental growth of 4.1%, and a rent collection rate of 99%.

The fund’s profit was £1.8 million, a slight decrease from £2.2 million in 2022. Fund manager Akeel Malik attributes this to the macroeconomic situation that has dominated the past year.

Akeel emphasized the continued need for rental homes despite economic uncertainty in the UK. He also highlighted the fund’s ability to maintain performance and develop as an institutional-scale UK residential portfolio, despite various challenges.

The fund has also focused on further expansion since the year’s end, reporting a new £20 million revolving credit facility (RCF) with Barclays in June. This is its first major lender collaboration, aimed at investing further in new rental homes.

The results also revealed a cash balance of £15.6 million, earmarked for post-year-end acquisitions. Akeel expressed confidence in the fund’s ability to continue investing in attractive purchasing opportunities in the next financial year.

The Urban Splash Residential Fund, established in 2017, actively engages with local communities and offers initiatives like 100% green energy and five-year inflation-linked leases. It has also partnered with a community platform called Ark, providing residents with access to local business discounts.

Akeel concluded by emphasizing the fund’s alignment with ESG and social impact goals, making sustainable living easier for customers and securing better returns for investors.