Legal & General Investment Management is nearing a deal with Renaker to buy a 44-storey tower in Manchester, which will be part of the UK’s tallest residential scheme.
It is in talks to forward purchase the 350-flat tower D on the 1,508 home Owen Street development, which also includes a 64-storey, 200m tower. That tower will be the tallest residential building in the UK bar London’s Shard, SE1, where there are only 10 flats.
Manchester Council approved plans in June 2016 for a SimpsonHaugh & Partners-designed scheme that comprises four towers rising to 64, 50, 44 and 37 floors, together known as Deansgate Square.
L&G’s prospective deal would see it take the second smallest tower – which still rises to 140m and would have an end value of £200m – for its rental arm, in a departure from its usual, more mid-market schemes.
Renaker describes the scheme as a “luxury” development, with “high-end residents’ facilities including a 25m swimming pool, indoor tennis court, a 1,900 sq ft gym and a dedicated residents’ lounges and relaxation areas”.
Deansgate Square is currently under construction, with final completion expected at the end of 2020.
L&G already owns 225 rental flats in Greater Manchester, which form part of the English Cities fund’s New Bailey Redevelopment in Salford.
Renaker is also no stranger to PRS deals, having sold the entirety of its 497-flat Greengate development in Salford to LaSalle Investment Management in 2016.
The developer recently received planning consent for two further residential towers of 51 and 21 storeys totalling 664 homes in Manchester’s Great Jackson Street development.
In total it is developing around 1,600 apartments across four sites at Greengate, Cambridge Street, Regent Road and Wilburn Basin in Manchester.
L&G has become one of the most prolific PRS investors in the country.
Earlier this month, L&G exchanged contracts on a £300m build-to-rent scheme in east London development hotspot Woolwich.
It already has 479 homes under construction at Blackhorse Road in Walthamstow, E17, and 251 homes at Taberner House in Croydon, but is now planning another 650 flats on a 2.2-acre site between Beresford and Macbean Street, SE18.
Regionally it has sites in Manchester, Bristol, Bath Leeds and Brighton and is aiming to double the 3,000 flats it owns across its nine schemes by the end of 2019.
Through its retirement, social housing and housebuilding divisions, L&G is intending to build 80,000 homes over the next five to 10 years.
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