Legal & General's Build to Rent housing pipeline hits 800 with new homes in Salford
On behalf of its Build to Rent partnership, Legal & General Capital (LGC) and Dutch pension fund manager, PGGM, today announced that they will be building 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 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, commented: “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, 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. As businesses like Freshfields relocate to New Bailey this will undoubtedly bring more residents to the area who are looking to live in this unique new location.
Private renting was once the dominant housing tenure in the UK (accounting for around 90% of the market in 1910) and since the 1990s has again been on the increase, overtaking social housing as the second most common form of tenure after owner-occupancy in 2012. Expected to account for 59% of 20-39 year olds by 2025, this equates to more than 1 million households over the next five years.
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.
“The progress that is taking place on the wider New Bailey development and the surrounding infrastructure is also extremely positive for the area. Improvements to the Ordsall Chord recently commenced in the city. Once complete, the Ordsall Chord will connect Piccadilly, Oxford Road and Victoria stations in Manchester for the first time. These much needed updates to the rail network will vastly improve connectivity and accessibility, bringing more businesses, people and investment to the area.”
For more information please contact:
Head of Communications, Legal & General Capital
t: +44 (0) 20 3124 2777
Head of Group Corporate Communications, Legal & General
t: +44 (0) 20 3124 2095
Notes to editors
Legal & General Group Plc
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £14.9bn (as at 31st December 2015) and is responsible for investing £746bn worldwide (as at 31st December 2015) on behalf of investors, policyholders and shareholders. Legal & General has over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2015, Legal & General's operating profit (on the IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively.
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
Legal & General Capital
Legal & General Capital (LGC) focuses on direct investments in four key sectors: UK Housing, UK Urban Regeneration, Alternative finance and Clean Energy. These reflect our aim to invest for the long term in economically and socially useful assets, to secure competitive returns and to create new asset classes for Legal & General’s varied investment requirements, for our partners and for the wider marketplace. We work closely alongside other businesses within Legal & General to ensure the broadest range of skillsets are deployed on any project and to utilise principal investment and asset management synergies across the Group. Investments to date have included CALA Homes (housebuilding), Media City/Salford (urban regeneration), Pemberton (alternative finance) and NTR (clean energy).
LGIM Real Assets
LGIM Real Assets is a division of Legal & General