Precede and Nomura loan £227m for First Street co-living

Precede Capital and Nomura announce £227m whole loan financing of Downing Living’s First Street co-living development in Manchester.

Outdoor communal area at the First Street co-living development in Manchester. Precede and Nomura have provided a £227m loan for the scheme, which will be constructed and managed by Downing | BTR News
Outdoor communal area at the First Street co-living development in Manchester. Precede and Nomura have provided a £227m loan for the scheme, which will be constructed and managed by Downing.

Real estate development lending platform – Precede Capital Partners – in a partnership with global financial services group Nomura, announce a £227m four-year whole-loan facility to Downing Living, the residential-focused division of property developer and operator Downing. The loan facility will be used to finance the construction of First Street, a co-living development in Central Manchester.

This is the first deal originated and arranged by Precede Capital since it announced its £1bn partnership with QuadReal Property Group earlier this month (January 2023), alongside its rebrand from Précis Capital Partners.

We are delighted to have closed this financing for a high-quality asset and to have provided the Downing Living team with the certainty and backing required to deliver an important project that will help meet the sustained demand for co-living schemes in this market. We are also particularly pleased to have closed our inaugural deal in the north of England, an important milestone which is testament to our team’s extensive industry relationships and our ability to identify and transact on high-calibre opportunities across the UK.”

David Jerrard, Chief Credit Officer, Precede Capital

The First Street development will be constructed and managed by Downing, a vertically integrated real estate developer and manager with a 30-year track record – and with over £2bn of real estate developments delivered across the UK. Completion of phase one is scheduled for August 2024, with phase two scheduled for delivery in March 2025. 

“We are delighted to be working with Precede Capital and progressing another landmark scheme for the city of Manchester. Our First Street development will complete the long-awaited transformation of a key site at the southern gateway to what is one of Europe’s most exciting and progressive cities. 

“First Street itself is part of a wider story of investment and confidence in Manchester, a future-proofed ‘15 Minute City’ where we will offer brilliant options to live, work and play on your doorstep.

“We have an excellent track record, working closely with the council, to deliver transformational city-centre regeneration schemes.”

George Downing, Founder of the Downing group of companies, which owns Downing Living
First Street co-living development | BTR News
First Street co-living development.

First Street includes 1,790 homes – a mix of studio apartments to five-bedroom shared accommodation across three buildings. The homes are targeted for new graduates and young professionals. Meeting Downing Living’s leading sustainability ambitions, the development will have heating provided by air source heat pumps, EV charging points and rooftop solar PV provision. Downing Living is also implementing a strategy for the asset to be net zero by 2038 depending on the extent of grid decarbonisation and connection to the Civic Quarter Heat Network, meaning it will be compliant with ‘net-zero ready’ requirement as contained in the Future Homes Standard. 

Located in the heart of Manchester city centre’s thriving First Street regeneration area, the location is ideal for commuters, with Deansgate, Oxford Road and Manchester Metropolitan stations within walking distance.

“We are pleased to partner with Precede Capital and QuadReal Property Group to finance the Downing Living development. This will help address the significant undersupply of residential units in the city of Manchester especially for underserved single households.”

Zhuu Ming Ang, Co-Head of EMEA Real Estate Financing, Nomura

The First Street loan facility, which is Precede Capital and QuadReal’s inaugural transaction, as well as Precede’s first development loan in the north of England and second jointly provided with Nomura, brings the total value of residential development loans completed by the firm to over £1.5bn. 

Precede Capital was advised by Taylor Wessing and Eversheds on this deal. Arcadis provided construction due diligence for the lenders, CBRE acted on the Valuation, and Longevity Partners on ESG due diligence. Downing Living was advised by Hill Dickinson (banking legal), DLA (property legal) and Brabners (construction legal). Nomura was advised by Linklaters.