L&G invest £57m in Tower Works – a new BTR scheme in Leeds city centre

Legal & General (L&G) has announced funding for its second Build to Rent scheme – Tower Works - in Leeds city centre.

Tower Works Build to Rent scheme, Leeds - L&G | BTR News
Tower Works Build to Rent scheme, Leeds.

Legal & General (L&G) is continuing to expand its Build to Rent offer as it announces, on behalf of its Build to Rent Fund (BTR Fund) and Access Development Partnership (a joint venture between Legal & General Capital and PGGM), that it has agreed to the funding of a £57m development site at Tower Works in Leeds City Centre. The announcement follows the £100m investment to develop Hockley Mills – a 400 apartment Build to Rent scheme, and L&G’s second in Birmingham. 

L&G was advised by Knight Frank, and Richardson and Ask Real Estate Ltd will act as developers at the Tower Works site. The scheme will deliver 245 apartments and works will start on site in the coming months. 

“In the last four weeks, we have committed £57m to Tower Works, £100m to Hockley Mills in Birmingham, and welcomed the first residents to our Mustard Wharf scheme in Leeds, Box Makers Yard in Bristol and the final phase of The Slate Yard in Salford. We continue to invest throughout the UK and demonstrate the need for homes with functional space to work, alongside convenient access to local cultural and leisure amenities.”

Dan Batterton, Senior Fund Manager, BTR, LGIM Real Assets

L&G – who have recognised the prospect for rental growth in Leeds – has acquired two Build to Rent sites in Leeds city centre – Mustard Wharf in 2017 and now Tower Works. Both sites are central to the landmark South Bank regeneration area. Together, the schemes will deliver 500 Build to Rent homes – a mix of one, two- and three-bedroom apartments. There will also be over 16,000 sq ft of commercial space.

Following L&G’s first investment in the Build to Rent sector in 2016, its business has grown rapidly. Today, it has committed over £2bn in the sector, with nearly 2,000 operational apartments and a pipeline to deliver a further 7,000 apartments by 2025. 

“As Covid-19 drives secular changes and a fundamental rethink of many areas of the real estate sector, Build to Rent has remained largely unaffected. It has delivered stable income returns throughout the crisis, with occupancy, rent collection and demand remaining high.”

Dan Batterton, Senior Fund Manager, BTR, LGIM Real Assets

Leeds is one of the UK’s largest cities in terms of population and economic output – yet housing supply in the city centre has been severely constrained over the past decade. Current housing stock is unable to meet the growing demand for rental accommodation.  

“As we prepare for economic recovery, greater investment in the UK’s regional cities – particularly to deliver vital new housing – is needed. The Build to Rent sector has an important role to play here, with Knight Frank research showing that more than 60% of new Build to Rent homes either under construction or with planning granted will be built outside of London.

“The government’s commitment for more funds to support its ‘levelling up’ agenda in November’s Spending Review, including for improving infrastructure and unlocking housing, means regional towns and cities have the potential to take the lead on building the strongest possible recovery. 

“L&G’s latest investment in Tower Works, Leeds, which closely follows its £100m investment in Hockley Mills in Birmingham, further demonstrates its continued commitment to the regions, and the growing strength of regional hubs across the UK. These developments will provide high quality, well managed housing for the local workforce, as we return to a more active economic environment.”

Adam Burney, Partner in the Residential Capital Markets team, Knight Frank