JV secures £157m to fund Moda’s Sackville Road scheme

Apache Capital and KKR JV secures £157m debt facility from BentallGreenOak to fund Moda’s Brighton and Hove development.

Moda Living's Sackville Road Build to Rent scheme, Hove - Apache Capital | KKR | BTR News
Moda Living's Sackville Road Build to Rent scheme, Hove.

Through their UK Build to Rent joint venture, Apache Capital and global investment firm KKR secure £157m debt funding from BentallGreenOak to finance the construction of Moda Living’s Sackville Road Build to Rent neighbourhood in Brighton and Hove. The development is the first investment to be brought forward in Apache Capital and KKR’s strategic partnership.

The Sackville Road scheme will deliver 564 Build to Rent homes, and the partnership will see over 4,000 purpose-built and -designed rental apartments developed by Moda Living in core cities across the UK as part of a £1.7bn development pipeline.

“The size of this facility matches the scale of our ambition and will help deliver one of the UK’s largest single Build to Rent schemes.

“Build to Rent, including both multi- and single-family housing, was attracting increasing interest before the pandemic, with investors and lenders looking to grow their exposure to asset classes underpinned by long-term demographic and structural trends. Now, with a higher inflationary outlook in the short to medium term, we expect Build to Rent to attract further interest as investors look to access real estate sectors better positioned to capture rental growth.

“Today’s [13 December 2021] announcement builds on our already strong relationship with BentallGreenOak, who we see as a long-term partner and are keen to explore further opportunities with.”

John Dunkerley, Co-founder and CEO, Apache Capital

The debt facility provided by BentallGreenOak will fund the construction and stabilisation of Sackville Road. Demolition of the site started in July and construction works have already begun on-site, with completion expected in early 2024.

This announcement marks the second development funding agreement between Apache Capital and BentallGreenOak, with BentallGreenOak having previously provided £80m to finance the delivery of Holland Park, Moda Living’s Glasgow Build to Rent neighbourhood. BentallGreenOak had also helped Apache Capital finance a number of site acquisitions prior to this.

“We are pleased to be supporting Apache Capital and KKR with the delivery of the joint venture’s Build to Rent pipeline with Moda Living.

“Covid-19 demonstrated the resilience of Build to Rent relative to other asset classes and we continue to see further opportunities in the living sectors and a unique opening for non-traditional lenders such as ourselves to step in and provide funding that will help unlock much needed new housing.”

Jim Blakemore, Managing Partner, Global Head of Debt, BentallGreenOak

Apache Capital and Moda Living secured the Sackville Road site in 2018. The Build to Rent homes are part of a wider nine-acre masterplan that includes 260 senior living homes, a new public realm and mixed commercial space.

Residents of the Build to Rent element, which will be managed under the Moda Living brand, will benefit from access to a wide range of onsite amenities and additional services – all-inclusive within the rent.

“Our Hove neighbourhood is going to raise the bar for rental living in the city, providing 564 state-of-the-art Build to Rent homes on a fantastic central site near the train station.

“The funding from BentallGreenOak will help enable the regeneration of a long-dormant brownfield site and deliver hundreds of high-quality homes for rent that will be unlike anything currently available in the Brighton and Hove rental market.”

Tony Brooks, Managing Director, Moda Living