Telford Homes and L&G complete Stratford BTR deal

Telford Homes and Legal & General complete an innovative forward-funding deal for a new Build to Rent development in Stratford.

CGI of the Build to Rent scheme on International Way, Stratford - Telford Homes | Legal & General | BTR News
CGI of the Build to Rent scheme on International Way, Stratford.

Telford Homes and Legal & General announce the completion of an innovative forward-funding deal to deliver a bespoke Built to Rent development in Stratford, London. Avison Young advised Legal & General Investment Management and Savills advised Telford Homes on the deal.

Both parties have adopted an innovative transaction structure – where the total consideration payable to Telford Homes is linked to the performance of the completed Build to Rent development. The structure provides a strong alignment of interest between Legal & General and Telford Homes, and creates an incentive for both parties to benefit from the development they create and its operational outperformance. The development is expected to be worth at least £150m.

Legal & General Investment Management (LGIM) will forward fund the entire Build to Rent element of the project on behalf of its Legal & General Retirement (LGR) business. Legal & General will own and operate the completed scheme.

We’re delighted to have completed this transaction using this innovative deal structure with Legal & General, which provides genuine alignment of interests and enables us to participate in the future success of what will become a truly market-leading, inclusive Build to Rent offering in this rapidly evolving part of London. We have been keen to share in the risk and success of our Build to Rent developments alongside our partners for some time, and this structure strikes a great balance for both ourselves and Legal & General.”

Charlie Weatherill, Capital Markets Director, Telford Homes

The development – at International Way in Stratford – sits in a prominent plot adjacent to Stratford International station. The scheme will deliver 247 Build to Rent homes, 54 discounted market rent homes, and high quality retail and commercial space. Amenities include roof top gardens and terraces, a concierge, lobby and gym. L&G Affordable Homes will also acquire and manage the 79 London Affordable Rent homes within the project, to create a fully inclusive, multi-tenure offering, to the benefit of all residents.  

The development has been designed with a focus on customer lifestyle and satisfaction, enduring quality, operational efficiency and sustainability. The scheme exceeds Part L building regulations with 42% cumulative CO2 savings in the residential areas and 36% for the commercial elements, and is targeting a BREEAM excellent rating. Construction work has already started, and completion is expected during 2025. 

“We’re delighted to have partnered with Telford Homes and Legal & General Affordable Homes to deliver an exemplar Build to Rent development in Stratford. The area has undergone significant regeneration and placemaking in recent years and is now London’s biggest rental hub. This, alongside its future employment growth potential and transport connectivity, makes it an attractive long-term rental destination and fantastic investment opportunity. 

“The development’s location 800 metres from Stratford underground station, its ESG credentials, high quality specification and first-class amenities set it apart from the competition.

“With housing delivery in Newham needing to grow by 40% to meet local plan targets, International Way will make a significant contribution to tackling the borough’s housing shortage.”

Adam Russell, Senior Residential Transactions Manager, LGIM Real Assets

This deal is Telford Homes’ seventh bespoke Build to Rent forward funding agreement and an important milestone for the business as it continues to grow its Build to Rent pipeline as a Trammell Crow Company Developer. The transaction will represent LGR’s fourth forward funding transaction and will expand the Group’s Build to Rent pipeline to over 7,500 homes across the UK.