Backing for rented homes
Investors back city housing plan in £215m deal
Deal unveiled for huge development
New investors plan to build 525 homes for rent in the centre of Edinburgh in a £215 million move which marks a step change in the housing supply.
The development in the Fountainbridge area also brings in a significant level of private equity funding.
Moda Living, with joint venture partner Apache Capital, bought the site ‘off-market’ from Grosvenor Britain &Ireland (‘Grosvenor’).
The JV will design, build, and manage the build-to-rent homes for the long term alongside the existing homes under the Moda brand. The venture also includes the purchase of 46 homes.
Grosvenor identified Moda for its expertise in build-to-rent and their ability to guarantee delivery through their backing from Apache Capital. The deal secures the main residential component in the Fountainbridge regeneration, which is helping revitalise central Edinburgh.
Designed by CDA architects, the new housing will sit alongside 25,000 sq. ft. of new build commercial space consisting of shops, bars and restaurants.
All residents will have access to 15,000 sq. ft. of on-site amenity space, including a gym, communal lounges, BBQ area and roof terraces with views of Edinburgh Castle, as well as fully managed communal gardens including a new public square. Moda aims to be on-site by end of year, with first phase completed by end of 2019 and all phases complete by end of 2022.
The site already comprises 250 completed homes, including homes for sale, affordable housing for the frail and elderly, serviced apartments, two student residences providing accommodation for over 600 students, and 46 private rented homes.
David Melhuish, director of the Scottish Property Federation said: “It is good news for Edinburgh. This project could be a real examplar for build to rent in Scotland.”
The scheme will be Moda & Apache’s second in Scotland, having purchased the former Strathclyde Police headquarters in Glasgow in October last year, with a view to deliver the city’s first homes purpose-built for rent.
The £115m redevelopment will see the complex transformed into c. 400 apartments coupled with on-site amenity areas and new commercial space.
The JV is pushing ahead with delivery of its portfolio across the UK, its flagship £155m scheme Angel Gardens, Manchester started on-site in January. It was granted planning for their £85m Liverpool waterfront development, The Lexington, in September last year. Plans for a £172m scheme on Broad Street, Birmingham have also been announced.
The JV has the largest pipeline of any rental developer, with more than £1.1bn portfolio of sites in city centre locations across the UK.
Tony Brooks, managing director of Moda Living said: “To work with Grosvenor, one of the world’s oldest and most prestigious property companies, has been fantastic for us.
“We look forward to continued co-operation as we deliver Edinburgh city centre’s largest scheme of homes for rent.
Richard Jackson, managing director of Apache Capital Partners, said: “Located in the heart of Edinburgh within an established regeneration area, this site matches our previous acquisitions and is perfectly in-line with our strategy of delivering best-in-class PRS developments in prime city centre locations around the UK.
“We are committing to delivering substantial premium product in Scotland’s domestic markets as the supply/demand fundamentals are still prevalent post-Brexit and further underlines the defensive nature of PRS as an attractive investment in times of economic or political uncertainty, with its ability to generate long term, stable and diversified income streams.
“The acquisition of Springside, is the seventh site that we have secured and under control in our JV with Moda and we have significant capital available to continue expanding our platform and to acquire and fund further sites.”
Gerry More, the Scottish Government’s private rented sector (PRS) champion, said: “The announcement of this major investment in the build-to-rent proposal at Fountainbridge is a substantial vote of confidence in both the Edinburgh property market and the Scottish Government’s plans to create flexibility, choice and affordability in the wider housing sector.
“This kind of purpose-built, high-quality and professionally-managed PRS development can rapidly increase the provision of much-needed new build housing, while at the same time positively transforming the experience of rented accommodation in Scotland for the long-term.”
Burness Paull and KPMG acted on behalf of the vendor, Grosvenor, with Brodies and Rettie & Co acting for the purchasers, Moda Living and Apache Capital.
> Cala Homes has submitted detailed plans (pictured below) for 400 homes on the 31-acre site of the former Jordanhill Campus.
Central to the proposal is the retention of the university’s Category B-listed David Stow building, which will be refurbished to provide apartments.
Graham House and Douglas House, which do not have listed status, are also to be conserved and converted under the plans.
The plans will enhance the existing landscape and create new public access to parkland located within the site. More than 40% of the proposed development will be retained as greenspace. Playing fields and acres of ancient woodland will be protected
The development has been designed by 7N Architects.