Hong Kong group Great Wall Real Estate Investments has secured its first deals in a £1bn push into UK residential development.
Great Wall will typically target small- and medium-sized schemes where it is less likely to have to compete with major UK institutions.
It is targeting an IRR of up to 30% for its Chinese investor base.
The privately held company has agreed to forward purchase around 200 flats at Renaker’s Alto project in Salford, Greater Manchester, and a further 80 flats at Lend Lease’s Cypress Place project in Manchester.
It is also in negotiations over several further schemes in Manchester and Birmingham.
Parts of Dandara’s Project Urban portfolio of regional development sites, which have the potential for 3,500 homes, are also being targeted by Great Wall, as is the group’s 995-home Chapel Wharf project in Salford (pictured).
A formal ceiling has not been set for the total size of Great Wall’s UK investment. However, it has indicated to developers and landlords that it has earmarked as much as £1bn for the portfolio.
The Alto and Cypress Place deals would represent roughly the first £50m of that commitment.
Cypress Place is part of Lend Lease’s 1m sq ft Green Quarter masterplan.
Lend Lease head of residential, Richard Cook, said: “Manchester is a very mature city living market, with development and demand coming back at a price point that gives overseas firms a more attractive level of entry than London.”
Great Hall is one of a string of overseas investors and major institutions that are actively attempting to build substantial UK residential portfolios.
Middle Eastern investor Apache Capital Partners has agreed to forward fund a major residential scheme at Manchester’s NOMA, while Legal & General and LaSalle Investment Management targeted Salford for early PRS investments.
chris.berkin@estatesgazette.com
