The £300m Greater Manchester housing fund is set to make its biggest loan so far; £70m to Renaker Build, to finance the construction of two skyscrapers at Owen Street, totalling 846 apartments.
At a meeting on Friday 16 December, the GM Combined Authority is being asked to approve the allocation to Renaker-subsidiary FQ Developments. The money would fund two towers of 66 and 44 storeys at the developer’s Owen Street development site, south of the city centre.
Renaker has planning permission for 1,500 apartments at Owen Street, across four buildings of 66, 52, 44 and 39 storeys, designed by SimpsonHaugh & Partners.
Work began on the first two blocks earlier this month. The second phase of 630 homes is due to start next year, with completion targeted for 2020.
Last year, Renaker was awarded £63m by the GMCA fund for two projects: £23m to LQ Investments for 300 apartments at Water Street in Castlefield, and £42.5m for 490 flats at Wilburn Street Basin in Salford.
If approved, the new loan would take the total received by Renaker from the GMCA to £132m.
The loan would also mean that almost £200m of the £300m fund has been allocated.
According to Bill Enevoldson, chief investment officer at GMCA, Renaker must have paid back the previous £63m in full, before receiving the £70m, in order to minimise the fund’s exposure to one developer. Renaker has already begun its repayment of the Water Street and Wilburn Street loans. Both projects are due to reach full completion next summer.
The £70m loan would mean 23% of the housing fund would be out to Renaker.
The £300m housing fund was created as part of the region’s devolution agreement. It launched in June 2015, and the GMCA has until March 2019 to draw down all of the money. The funds can be reinvested over a 10-year time frame, potentially delivering a total development value of £1.5bn.
With a limited time to draw down the funds, allocations to larger city centre apartment schemes allow GMCA to commit the finance faster, however Enevoldson highlighted that the fund has also backed smaller £1m projects in Wigan and Stockport.
Renaker is arguably the most prolific residential developer operating in Manchester, with apartment blocks recently completed at Manchester’s Cambridge Street and Salford’s Wilburn Street, active sites at Water Street and Owen Street in Castlefield, Greengate in Salford, and a planning application in for an additional Castlefield plot.
Speaking to Place North West, founder and managing director Daren Whitaker said that it was the developer’s in-house construction capabilities which meant it could speed up the build time.
“Having come from the background of a national contractor, a lot of design time, negotiations and legal time is put into selecting a contractor. Because we have that capability in-house, we can overlap that process, and get on site faster.”