Resi wrap: Landsec’s £600m development drive

Welcome to your weekly round-up of residential stories from EG.

Two deals for Landsec this week saw the REIT add 5,000 homes to its pipeline.

Landsec started the week by announcing a £190m takeover bid for regeneration specialist U+I. The deal will be a big boost for one of the pillars of the new strategy launched by chief executive Mark Allan (pictured) last year – namely, Landsec’s focus on mixed-use urban regeneration projects. “The strategic rationale for this deal for us is all about accelerating that leg by providing access to, and optionality over, a significant pipeline of high-quality projects,” Allan said.

Landsec is focused on three schemes: U+I’s 50% share of the 1,500-home Mayfield project in Manchester; Morden Wharf in Greenwich, adding a further 1,500 homes; and the office scheme at Landmark Court in Southwark. A further 1,800 homes were added to the pipeline just days later, with the news of a £425.6m deal to buy 75% of L&G and Peel’s MediaCity in Salford.

The REIT has previous experience with large residential projects, for example securing consent and selling the 1,800-home former Kodak site in Harrow and a similar strategy at Ebbsfleet Garden Village. As Landsec doubles down on mixed-use, with further sites in Camden and Lewisham, these sites could offer opportunity for Landsec to finally move into BTR and retain assets.

Scotland-based investment manager Abrdn is also re-evaluating its real estate strategy and shaking up its approach to residential. Following a restructure in August to bring real estate and infrastructure together as a single real assets team under head of global real assets Neil Slater, Abrdn has seen several senior departures.

Andrew Creighton, global head of real estate investment management, will leave Abrdn after almost a decade. Head of UK residential investment Ed Crockett will also leave at the start of next year, as will deputy fund manager Corrine Stevens. The company shift includes hiring new roles from Patrizia and Eastdil.

Finally, as global leaders head to Glasgow for COP26, real estate’s contribution to the climate crisis is under sharper focus. A new report from Savills estimates some £330bn of investment could be needed for the residential sector to meet the country’s 2035 net zero target.

For residential and the rental sector in particular, despite contributing significantly higher energy usage and emissions, ESG guidance has been lacking. However, this week the British Property Federation released its first guide for the sector. The BPF has teamed up with institutional investors to collate and evaluate some 42 frameworks and accreditation systems.

James Simondson, assistant director of policy at the BPF, said: “ESG serves two chief purposes – it acts as a tool to mitigate risk from the known and unknown future and build resilience to these risks, and a framework within which real estate can create positive environmental and social change.

“We must work to redefine real estate’s role in tackling the problems we face as a society, and the ESG framework is a tool to do this.”

View the magazine, download the app (iOS and Android) and read on for more of the week’s headlines:

Investors ready £7.8bn for suburban BTR

Round Hill and CPPIB form €1bn student venture

FEC hunts BTR funder for 1,500-home Victoria North

Blackstone raises £280m for affordable housing

Staffordshire housing association secures £267m funding deal

COMMENT: Modular homes can help homeless people get back on their feet

Schroders taps investors to help homeless

Developer sought for £1bn Edinburgh bioquarter

Clarion lodges plans for £200m Leeds regen

Apache’s Present Made ploots £215m Bedfordshire scheme