Finally, a ground breaking property deal has been agreed which sees institutional investment a large scale residential development first time in the UK as revealed by this article by the Property Wire on August 6, 2013.
London Mayor Boris Johnson said that the development at Newington
Butts, Elephant and Castle, has set the stage for further institutional
investment in the capital's residential property market, accelerating
delivery and boosting the economy.
Under the deal the site, which
is owned by the Greater London Authority, will see preferred developers,
Mace and Essential Living, using institutional investment to deliver
one of the largest professional rental developments seen in the capital
for decades, containing 462 units, 188 of which will be affordable, and
creating hundreds of new jobs.
In the first deal of its kind in
the UK the developers have, at a pre-development stage, secured
institutional backing via M3 Capital Partners working with Essential
Living. The Mayor has actively sought to encourage institutional
investors, such as pension funds and insurance companies, to invest in
residential construction and take development risk in order to increase
and accelerate the number of homes being built.
Johnson said that
the deal represents a major step forward in this work and it is hoped
will encourage other institutions to invest in developments across the
capital.
In a major milestone for the London's property market the
tower will also contain one of the largest number of homes for long
term private rental in the country when complete. Over the last decade
the number of households in the UK in rental accommodation has increased
by 77%, with over a quarter of London households renting.
The
Mayor, who wants to speed up supply of purpose built private rented
homes that will give tenants greater security via longer leases, was
particularly keen that this prime site, close to the heart of London,
had a substantial private rented offer.
The homes, when complete,
will offer a unique high quality bespoke rental design, professional
management services and attractive communal areas including a seven
storey terrace area. Homes in the tower, designed by Rogers Stirk and
Harbour architects, will also be available on long leases and will
mirror similar style longer term rental apartments in large cities in
the United States.
As well as these residential units the site
will also include a new theatre space for the Southwark Playhouse and a
café as well as retail and marketing space.
The development of the
Newington Butts site is a key part in the on-going regeneration of the
Elephant and Castle opportunity area, helping to create a town centre
that will provide employment, better homes, improved transport links and
community facilities for residents.
‘Housing, like roads and
railways, are a vital part of the capital's infrastructure. We need to
build more homes in London if we want to secure the capital's economic
future and the importance of institutional investors in making this
happen cannot be ignored,’ said Johnson.
‘This holy grail of
investment in the riskier pre-development stage is a hugely important
milestone but it is just the beginning. I want to entice other
institutional investors to come forward and invest in quality homes for
Londoners, boosting the economy and creating thousands of new jobs,’ he
added.
David Grover, chief operating officer for investment at
Mace, said that the firm is committed to helping shape sustainable
cities across the UK and overseas through smarter infrastructure and
better buildings.
‘This fantastic development will help deliver
the Mayor's vision for future living in London, a completely new type of
rental offer in the London market, and we are proud to play our part.
Mace will be sharing its experiences and expertise from creating high
rise residential schemes in both the UK and Middle East to make sure
that the Newington Butts scheme is realised in style and recognised as a
pioneering development. Following our success on another project at
Greenwich Square last year, this new joint venture development company
at Newington Butts, is the next logical step in Mace's growing
relationship with the GLA,’ he explained.
Darryl Flay, chief
executive of Essential Living, praised the Mayor for leading the way and
said he had set the scene for the creation of ‘a new, truly
professional rental market where tenants are treated like customers with
great amenities, longer leases and a home actually designed for
renting’.
He
also pointed out that with over £100 million being invested the project
will support the capital's work force by providing flexible, high
quality rental accommodation that will help draw in future investment
for the area.
‘With a quarter of Londoners now renting mainly
from amateur landlords, it is vital that we create a branded sector that
can deliver real quality for the first time. Because we manage the
homes we build for rent, it enables us to take a long term approach to
development, which differs hugely from traditional house building,’
explained Flay.
‘With its fantastic connectivity, Newington Butts
will be one of the capital's landmark developments, showcasing to
everyone what new, brand driven rental homes could be. The amazing work
being undertaken across Elephant & Castle is a fantastic example of
how ambitious place-making and dynamic civic leadership is transforming
our capital and we look forward to working with the Mayor on delivering
for Londoners,’ he added.
The development will be a welcome
addition to the area, according to Southwark councillor Fiona Colley.
‘This is excellent news for an area that is shaping up to be one of
central London's most vibrant destinations. I'm really pleased to see
the regeneration of Elephant and Castle gaining momentum, with work on
new homes and a new leisure centre already underway,’ she said.
‘Over
the next few years, the area will continue its transformation into a
great place to live, work and visit, with the demolition of the Heygate
estate, improvements to transport, and the creation of thousands of
jobs, homes and central London's biggest new park,’ she added.
The
Peabody Housing Trust have been appointed to manage the affordable
housing element with 159 shared ownership and 29 rental units. Work on
the tower will begin early next year and it is earmarked for completion
in 2017.
Article Source: http://www.propertywire.com/news/europe/london-development-rental-deal-201308068084.html
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