Legal & General agrees funding for £100m Birmingham development
Legal & General has agreed the funding for a £100m development site at Hockley Mills in Birmingham town centre.
This will be the 16th build-to-rent site and second in Birmingham for the Legal & General build-to-rent (BTR) fund, with this development taking its total investment in the sector to £2.1bn.
For BTR, rent collection levels remain high with Knight Frank estimating that 95% of rent in the BTR sector was collected in Q2.
The scheme will deliver 395 apartments; one, two and three bedroom, alongside a new entrance to the Jewellery Quarter train station, 116 car parking spaces and 28,000 sq ft of flexible commercial space for retail, leisure and offices.
Dan Batterton, senior fund manager, BTR, LGIM Real Assets, said: “In the space of the last few years, the BTR sector has really come into its own.
“It has cemented its position in the UK as an asset class and successfully evolved away from the private rented sector.
“Showing its resilience and relative counter cyclical nature of the residential sector, BTR has remained largely unaffected throughout the coronavirus pandemic, as occupancy, rent collection and demand has remained high.
“The Hockley Mills development further strengthens our existing portfolio, bringing our total number of schemes to 16 in eleven cities providing more than 5,300 apartments.
“The scheme will deliver high-quality, professionally-managed rental accommodation that can help to address the supply demand imbalance in Birmingham.”
Hannah Badger, associate in the residential capital markets team at Knight Frank, added: “During periods of economic stress, residential assets are seen as extremely attractive by investors, in part due to both their resilience and counter-cyclical rental performance.
“Our view remains that, long term, the current Covid-19 crisis may well act as a catalyst for an acceleration of institutional capital into the UK’s residential investment sector.
“Since March activity has remained strong as investors seek to increase their exposure in the UK market – indeed, recent Knight Frank research found that 77% of investors are looking to maintain or increase their investment plans in the near future.
“As the UK’s largest city outside of London, investment in Birmingham’s BTR market has always been strong.
“However thanks to the regeneration of the city centre and the upcoming HS2 line enabling even quicker links into the capital, demand by investors for high quality rental assets is certainly on the rise and is showing no signs of slowing down, despite the current wider market headwinds.”