L&G, Nest and PGGM have acquired the first site for their new £1bn build-to-rent (BTR) joint venture.
The recently launched partnership, which intends to build a portfolio of BTR assets worth up to £1bn in the coming years, has acquired the F1 site in the New Jackson neighbourhood of Deansgate, Manchester, for an undisclosed price from Renaker.
The partnership will forward-fund the development of 494 one-, two- and three-bedroom apartments in the 51-storey building, which will feature circa 10,000 sq ft of amenity and resident facilities, including a gym, private gardens and co-working space.
L&G owns the adjacent North and West Towers in Deansgate Square, which will create opportunities for wider placemaking and activation of the local area.
Dan Batterton, head of residential, asset management, at L&G: “This partnership demonstrates how investment from domestic pension schemes as well as international private capital can support the UK government’s push to boost investment into productive assets, accelerate growth, and deliver pensions savings. We’ve been highly selective when exploring potential sites, and the outstanding characteristics of this development reflect this rigorous and detailed process. With a thriving economy and a rising number of professionals working and aspiring to live in the city centre, the rental market in Manchester is robust.
“Having launched our BTR strategy in 2016, we’ve accumulated almost a decade of experience in the UK rental market. This extensive knowledge allows us to offer partners unparalleled insights and the advantages of our economies of scale to deliver high-quality rental accommodation at pace. Leveraging our experience developing the North and West towers in Deansgate Square, we’ve incorporated local market insights that will deliver a highly attractive proposition for renters, while aiming to provide strong returns for investors. These homes will not only offer an enhanced living experience, but also address housing shortages by increasing the supply in high-demand areas.”
Matthew Forward, senior investment manager real estate, at Nest, added: “We’re pleased to embark on this new partnership [with L&G and PGGM] with such an exciting project. It’s a fantastic opportunity right in the heart of Manchester, providing much needed, high-quality rental properties for a growing city. We look forward to expanding our portfolio with more UK sites, complementing the £3bn we’ve already directly invested in UK real estate.”
Dirk Bootsma, senior investment manager private real estate, at PGGM, said: “The acquisition of F1 in Manchester is the next step of our long-term partnership with L&G. This is a great example of our ambition and commitment to deliver strong social and financial returns for the participants of our client Pension fund Zorg en Welzijn (PFZW). We see the social value of realising new, high-quality rental housing as an additional benefit that fits with the investment philosophy of PFZW.”
Daren Whitaker, chairman of Renaker, said: “We are delighted to have reached an agreement on this new and important addition to New Jackson and to build on an already established and successful relationship with L&G. We look forward to delivering this iconic new development and 494 high quality new homes on behalf of the partnership.”
L&G, Nest and PGGM were advised by CBRE.
