Apache Capital and Harrison Street, one of the leading investment management firms exclusively focused on alternative real assets, are to fund a landmark Build to Rent development in central Glasgow. Demolition works have already started on-site, with completion due in March 2022. The scheme will be delivered and managed over a long-term by Moda Living.
The site was purchased in October 2016 – and the transaction was one of the largest property deals to take place in Scotland after the Brexit result, marking a clear vote of confidence in the Scottish rental market.
This investment is the fifth project in the Build to Rent joint venture between Apache Capital and Harrison Street. Apache, backed by UK insurer NFU Mutual, and Harrison Street, launched the JV to deliver high quality Build to Rent developments in core cities across the UK. Back in April 2020, the joint venture’s fourth project funded Moda’s Edinburgh Build to Rent scheme.
“Alternative residential sectors such as Build to Rent were already seeing increased interest from institutional investors prior to the pandemic thanks to compelling market fundamentals and the promise of liability matching income streams with defensive, counter-cyclical qualities.
“Covid-19 has further demonstrated the resilience of Build to Rent as an asset class, while we continue to outperform expectations at Angel Gardens in Manchester, our flagship UK Build to Rent development with Moda Living.
“Glasgow marks our fifth investment in the platform with Harrison Street and Moda Living and we look forward to seeing the scheme progress alongside our other projects.”John Dunkerley, CEO and Co-founder, Apache Capital Partners
The Glasgow Build to Rent scheme – called Holland Park – will see 433 new homes across four apartment blocks replacing the former Strathclyde Police headquarters on Pitt Street. The scheme will provide 15,000 sq. ft. of internal amenities, including communal lounges and health and wellbeing zones.
There will also be 31,000 sq. ft. of outdoor amenity space, with the four apartment buildings set around a courtyard open to the wider public during the day. Residents will also have access to landscaped terraces overlooking Glasgow’s skyline. There will be mixed commercial and leisure space on the ground floor – including cafes, bars, restaurants and co-working facilities.
“Glasgow is a key commercial centre within the UK, with a strong local economy that includes thriving financial services, technology and life sciences sectors. The city is home to a world-class university, renowned culture and attractive leisure scenes, however there is a significant under-supply of high-quality rental housing, with a lack of highly amenitised purpose-built private rented accommodation.
“We are pleased to further strengthen our partnership with Apache Capital, who, together with Moda Living, have emerged as market leaders within UK private rented accommodation and are successfully pioneering a new model of high amenity, high service Build to Rent that will no doubt prove attractive to the UK’s growing number of private renters.”Paul Bashir, CEO, Harrison Street’s European business
Glasgow is Scotland’s most populous city and the third most populous in the UK. Major employers include banks and insurance firms such as Barclays and NFU Mutual, leading energy companies such as ScottishPower, and national broadcasters including the BBC and Channel 4.
In addition to Holland Park in Glasgow, current Moda neighbourhoods being funded by the joint venture include The Lexington in Liverpool – which topped out the tallest tower in August 2020, The Mercian in Birmingham, New York Square in Leeds – which in March 2020 Apache Capital agreed a £150m GDV debt financing with LaSalle, and Springside in Edinburgh, representing a total of 2,322 homes.
“As an investor, operator and developer of Next Generation Neighbourhoods, Moda has a track record of adding value to communities and delivering a housing product that locals need. Our residents’ want to live in high-quality, professionally managed homes, with ready access to generous indoor and external spaces. As we enter 2021, the market is showing accelerated growth, with interest from renters in new-build developments located in cities undergoing major regeneration.
“Significant institutional investors are more attracted than ever to the Build to Rent sector, driven by the granular income which has proven its resilient qualities during these uncertain times. The latest investment from Apache Capital and Harrison Street is testament to the strength and quality of the Moda brand and proposition. The Build to Rent sector is currently valued at £9.6bn but predicted to reach £550bn over the next decade, supplying over 1.7m new homes, and Moda Living will remain at the forefront.”Johnny Caddick, CEO, Moda Living