Banks NatWest and Santander UK back Vita Group and Greater Manchester Pension Fund’s joint venture with a £126m debt package against Circle Square – a Build to Rent development in Manchester. Addleshaw Goddard and CBRE provided advice for the Lenders, Hill Dickinson for Vita Group and Avison Young and Trowers for the Greater Manchester Pension Fund.
“Gaining the backing of these prestigious institutions is of great value for the business and will facilitate the long-term development and operational plans for these market leading assets. Vita Living performs incredibly well in the market, driving demand from city centre renters and achieving high occupancy rates, as a result, it creates a compelling proposition for investors and funds. We’re delighted to have NatWest and Santander on board and look forward to further building upon this relationship.”Michael Slater, Chief Financial Officer, Vita Group
Appointed as debt co-ordinator on the deal, NatWest – who were also involved in the original development financing of the scheme – sought third-party liquidity. Following discussions with several lenders, Santander was instructed due to its speed and proactivity, agreeing to provide £42m, leaving NatWest with a hold level of £84m.
“NatWest has a long history of supporting the residential market across all tenures, and we are proud to be playing our part in providing high quality, professionally managed homes for the rental market in Manchester. This transaction is another example of how we provide execution excellence, deliver optimal funding solutions alongside our lending partners, and solidify our role as a cornerstone real estate debt coordinator.”Damini Lad, Vice President of Structured Real Estate Finance, NatWest Group
The £126m debt package assists with the refinancing of existing development facilities and enables the reimagining of some of assets’ social and co-working spaces.
“We are delighted to support Vita Group and the Greater Manchester Pension Fund with their refinance event, by continuing to lend against their exceptional Vita Living apartments in Manchester and arranging the investment term loan with Santander.”Andy Clarke, Relationship Director, NatWest Group
In 2017, Vita Group and Greater Manchester Pension Fund’s joint venture launched to build Vita Living, 683 Build to Rent apartments at Circle Square in central Manchester.
“Santander is absolutely delighted to commence a relationship with Vita Group, and support the refinance of this joint venture with the Greater Manchester Pension Fund. The quality of the Vita Living accommodation is undoubted, and we look forward to additional opportunities to support Vita Group going forwards.”Matt Jones, Relationship Director, Santander UK
With bills included in the rent, the apartments come fully furnished and residents benefit from amenities including a gym, lounges, private dining spaces and co-working spaces. The scheme opened in 2022 and has achieved close to 100% occupancy.
“The Greater Manchester Pension Fund are delighted to continue their involvement at Circle Square working alongside NatWest, Santander and joint venture partner, Vita Group.
“After a successful construction programme, which delivered a first-class development, we look forward to the next phase of the project where the early popularity of the apartments will be built upon. With Vita Group applying their experience of creating highly desirable places to live, new retail and leisure operators filling up the ground floors, we expect the tenant experience to be enhanced over the coming years, ensuring the popularity of the apartments continues.
“The project is further evidence of the Greater Manchester Pension Fund’s continued investment within Greater Manchester, helping to stimulate the local economy whilst at the same time providing much needed new homes.”Gareth Conroy, Director at Avison Young, property advisors to The Greater Manchester Pension Fund