Legal & General Capital (LGC) and Dutch pension fund manager, PGGM, are to build more new homes in Salford, following the acquisition of a further site in Salford from developer English Cities Fund (ECf).
This latest addition brings the Build to Rent joint venture’s current pipeline to nearly 800 new homes, with a total capital commitment of over £250m.
Through the creation of a new build to rent asset class, Legal & General is looking to use its long term capital to help address the chronic long term lack of supply of housing and meet the increasing demand for affordable, quality rental accommodation.
The partnership will initially invest £600m into building purpose built private rental housing across the UK, providing over new 3,000 homes. This latest purchase is the partnership’s second acquisition in Salford, with further schemes in Bristol and Walthamstow, London. Located adjacent to the existing New Bailey build to rent scheme and being developed by ECf, the new Salford site has full planning consent for 135 units over 15 storeys, providing a total of 225 new homes which will be managed by LGIM Real Assets.
James Lidgate, director of housing at Legal & General Capital, said: “Much has been made about generation rent, but for us this is about generation choice. We are proud of our philosophy for Built to Rent and will only invest in and develop purpose built schemes that offer renters a good quality, affordable choice that suits their personal circumstances and lifestyle.”
Bill Hughes (pictured), head of LGIM Real Assets, said: “With long term ownership at the heart of our designs, we will ensure that lifecycle costs, maintenance and management of these homes is considered right from the outset of our land acquisition process so that we can pass on a high quality service and good value costs to our residents. Successful international comparisons, such as the Netherlands, Germany and US, demonstrate to us that the UK has a long way to go and we believe that through professionalising the private rental sector we are able to encourage better standards across the board.”
The new homes will be located on a riverside site adjacent to Spinningfields, within 200m of Salford Central station and 15 minutes’ walk from Manchester Piccadilly. The construction is due to begin in April 2016, with practical completion to be delivered in March 2018. Devised and designed by the ECf, which is a joint venture between Muse Developments, Legal & General and the Homes and Communities Agency, New Bailey is a major regeneration scheme delivering a completely new destination for business and leisure in the city.
International law firm Freshfields Bruckhaus Deringer recently announced that it will be leasing 80,000 sq ft at nearby One New Bailey, the 125,000 sq ft office development which is currently on site and due for completion in May 2016. The development will provide a long term base for Freshfields’ Global Centre and high levels of interest are being reported in the remaining 45,000 sq ft.
Phil Mayall, development director at ECf, said: “The investment from LGC and PGGM is further testament to the momentum that is building on site as the scheme progresses at a pace. The two Build to Rent developments are the first of their kind to achieve institutional investment in Manchester, which means that real progress is now being made to bring both schemes forward.”