Fund buys Miller apartments in move to expand rent portfolio

Christopher Down has a £1bn funding target in his sights. Picture: complimentary

Hearthstone Investments will let the flats in Miller’s Varcity North and Varcity South developments. The deal marks a trend for fund managers moving into the residential lettings market and a respite for builders facing a housing market in the doldrums.

Hearthstone was founded three years ago to offer private investors access to residential property. Chief executive Christopher Down, a chartered accountant, expects to raise £250 million from investors in the next two years, with a longer-term goal of £1 billion. The fund launched last year with £60m “seed funding” from housebuilders Bovis and Barratt.

Flats in the developments on Crewe Road have been advertised for sale between £99,000 and £265,000. The firm declined to give details of how much the transaction was worth or how many flats it acquired from Miller.

Hearthstone said the deal takes its property assets under management to approximately £30m.

This year the fund has acquired a range of units in England from Crest Nicholson and Morris Homes, as well as buying 34 flats from developer Quintain Estates in a £7.7m deal in February.

Down said: “The properties in Scotland will be a great addition to our existing portfolio. As the first Scottish properties they add a new dimension to the diversified nature of the fund, as well providing a strong stable rental income. Our movement into the Scottish market forms part of our overall goal to change the way the UK invests in residential property, which, valued at £4 trillion, is the UK’s largest asset class.”

Anne Marie Britton, sales director for Miller Homes Scotland East, said both developments were “incredibly popular due to their highly sought after setting close to Edinburgh city centre and diverse mix of luxurious properties which appeal to a wide variety of lifestyles”.