Cording Real Estate Group, the Northern European real estate investment management firm, has agreed its first build to rent investment in the UK private rented sector (PRS).
Cording has entered into a forward-funding agreement in excess of £40 million with the Cassidy Group and Regency Project Management Limited for a development in Nottingham. The development, called Saffron Court, is located by the landmark refurbished Hicking Building, close to the popular tram stop and south of the central train station. It bridges the gap between the town centre and West Bridgford and provides a catalyst for regeneration in the southern part of the city.
Construction of Saffron Court will begin this month, as it already has planning consent for a mix of 350 studio, one and two-bed apartments and 130 car parking spaces.
Winvic is constructing the development, building on its previous experience of building care home, student accommodation and PRS blocks, including a site on Vaughan Way in Leicester.
The investment is being led by Cording’s new UK PRS business, which was launched a year ago with the acquisition of specialist PRS company, CapRes. CapRes’ founders, Tim Holden and Charlie Miller, who have long experience and an outstanding track record in the UK PRS sector, head Cording’s new PRS platform.
The investment is made on behalf of Cording’s UK PRS Club 1 LP, a closed-ended vehicle set-up for institutional real estate investors seeking to capture the benefits of the ongoing shift in the UK residential market from owner-occupation to renting in a market which is massively undersupplied.
The Club is planning to make further forward-funding investments in the PRS sector in the next few months and is seeking to deliver its investors double-digit investment returns.
Tim Holden, Director of Residential Development and Asset Management at Cording, said:
“Nottingham is a compelling location for our first build to rent investment in terms of demographics, local economics and affordability”.
“Over 300,000 people live in Nottingham, of whom 48 per cent are under the age of 29, including a thriving student population. According to the ONS, the local economy is expected to grow significantly faster than UK averages by 2020, supported by its expanding healthcare and biotech sectors”.
“Much of the housing stock in Nottingham is old and the supply of new dwellings has been very limited. As such, we expect strong demand for our completed product which has been designed specifically for the PRS market”.
John Partridge, Chairman of Cording and Sponsor of the Cording PRS business, said:
“Our strategy is to invest in build-to-rent opportunities in the regions and Outer London focusing on rents which are affordable in the lower to mid-tier of the market. In our view this segment provides the best demand-supply characteristics and offers particularly attractive risk- adjusted returns”.
“For our investors and partners, both our target market and our fully-integrated PRS platform, which provides in-house services covering development management, portfolio management, asset management, property management, leasing and technical management, are key differentiators”.