Legal & General has committed £100m into a second build to rent project in Birmingham.
Through its Access Development Partnership, a joint venture between Legal & General Capital and PGGM, the fund is ploughing the cash into a development site at Hockley Mills, in Birmingham’s Jewellery Quarter, where it will deliver 395 flats, 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 at 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.”
Hannah Badger, associate in the residential capital markets team at Knight Frank, which advised L&G on the deal, added: “During periods of economic stress, residential assets are seen as extremely attractive by investors. Since March activity has remained strong as investors seek to increase their exposure in the UK market. Recent Knight Frank research found that 77% of investors are looking to maintain or increase their investment plans in the near future.”
For BTR, rent collection levels have remained high during the pandemic, with Knight Frank estimating that 95% of rent in the BTR sector was collected in Q2.
The Hockley Mills site, where Sir Robert McAlpine has been appointed developer, will be L&G’s 16th investment into BTR, a sector into which it has ploughed £2.1bn.
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
