L&G funds build-to-rent project

Legal & General Capital is to forward fund the £16m development of an apartment block next to the River Irwell at English Cities Fund’s New Bailey scheme in Salford.

English Cities Fund is a joint venture between Muse Developments, Legal & General and the Homes & Communities Agency.

Legal & General claims the AHR-designed project will be the first custom-built PRS scheme to be delivered in Greater Manchester. There is outline planning consent and a reserved matters planning application has been submitted.

ECf will secure funding from LGC for the £16m scheme, which forms part of the New Bailey development and will create a total of 90 homes on the border of Salford and Manchester, next to Spinningfields. The properties will comprise a mixture of one, two and three bedroom apartments, expected to be completed in 18 months.

Phil Mayall, development director at ECf, said: “With its convenient location and close proximity to city centre amenities, including the bars and restaurants of Spinningfields a short walk over the bridge, it makes perfect sense to include a residential element within New Bailey and we think a PRS offering here will be a good fit. As more businesses and people are undoubtedly attracted to the area, it will become even more desirable as a place to live, work and visit.”

Laura Mason, director of direct investments at Legal & General Capital, said: “The renaissance of Salford is one of the best success stories in UK urban regeneration. Situated in a waterside location, within walking distance of Manchester Piccadilly and 200m from Salford Central, we have the ability to provide a new class of rental accommodation, based off fair value rents but with a higher quality offer, and greater tenant service and flexibility.”

With an appetite to invest up to £1bn in the sector over the long term, the deal represents LGC’s second PRS investment, having recently acquired a regeneration site in Walthamstow, London, with planning for over 300 flats. It will seek to partner with like-minded international capital, in order to grow a significant, UK-wide portfolio of good quality, fairly priced, well located schemes in key cities.

New Bailey features a 143-bed Premier Inn and a 615-space NCP car park, both of which are complete and open. One New Bailey, a 125,000 sq ft office development is also currently under construction and due to complete in May 2016. The development will ultimately include a vibrant mix of cafes, bars and restaurants, as well as enhanced public realm to the exterior in the form of a new public square, extensive landscaping and an outdoor events space.

ECf is responsible for bringing forward the regeneration of the wider Salford Central development.