Construction and services group Bouygues Development and Grainger, the UK's largest listed residential landlord, have announced the creation of the unique residential investment fund.

The Build-To-Let will provide institutional investors with the chance to invest into the private rented sector, which to date has proved relatively inaccessible.

The fund will have a dedicated portfolio of purpose built development sites in London and the South East, which will total over 1,000 residential assets on completion.

Construction by Bouygues will begin early next year and end in late 2013, with Grainger managing the sites after completion.

The two companies will co-invest into the fund up front but are seeking additional equity investment from institutional investors, totalling up to £150 million.

A joint statement said the fund aims 'to capitalise on the appetite of UK and overseas investors to put long term money directly into residential property'.

'The fund is also strongly aligned with the UK Government's plans to increase the number of new homes being built, and the housing minister's public land initiative,' it continued.

Nick Jopling, executive property director at Grainger, commented: 'The fund represents a significant milestone in the evolution of the UK residential property sector.

'[It] is a major step towards creating a large scale, attractive and accessible private rented sector in the UK,' he added.

Bouygues chairman, Madani Sow hailed the partnership as a 'great achievement' and said it demonstrated 'our willingness to establish the private rented sector as a new asset class'.