Managing director Richard Jackson is joined by Andrew Teacher of Blackstock Consulting, Graham Chilver from Barclays, and Alex Notay from Places for People to discuss the rise of the rise of build-to-rent developments across the UK. The group also discuss the new methods of financing that is powering the build to rent boom.
Mixed Use: the Changing Face of Britain’s Town Centres
Apache Capital Partners has secured a £118m debt facility from Goldman Sachs to construct Birmingham’s tallest residential building, as it accelerates delivery of its build-to-rent pipeline with Moda Living. The 4.5-year facility includes a 12-month extension option. Goldman Sachs is a significant global investor in the US and European rented residential markets and the transaction marks its’ first UK multifamily development loan.
Planning was granted for the 42-storey skyscraper at 212-223 Broad Street, Birmingham in December 2017. Future residents will be within walking distance of the city centre and new HS2 terminal, with Broad Street and the surrounding area also undergoing massive regeneration. A three-storey podium with a rooftop running track, the first in a UK residential development, will also house an additional 35,000 sq. ft. of retail and commercial space.
The £184m GDV scheme is being delivered by Apache Capital Partners and Moda Living, an owner, developer and operator of private rented housing.
Apache Capital Partners has exchanged contracts with a joint venture between Greystar Real Estate Partners LLC , a global leader in the investment, development and management of rental housing, a subsidiary of the Public Sector Pension Investment Board and Allianz Real Estate to dispose of a large purpose-built student accommodation (PBSA) asset in London’s Shoreditch.
Paul Street was developed by Apache with JV Partner McLaren Property with the building being completed in August 2015. It has been 100% let in every year of operation.
The sale of Paul St. East, in the heart of London’s tech quarter and close to Amazon’s east London office, for in excess of £160m is one of the biggest single-lot transactions in the history of UK’s PBSA and sets a new pricing benchmark for the sector.
Apache Capital plans to reinvest funds from the deal into its own build-to-rent pipeline with Moda Living, one of the UK’s largest national multifamily pipelines with 6,500 apartments across nine cities.
Apache Capital Partners disposed of its prime 251-bed purpose-built student accommodation property Brunswick House, in Cambridge to Cambridge County Council for £38m in August 2018.
Brunswick House, which was completed in July 2012 and comprised 231 en-suite cluster flats and 20 self-contained studio flats, is situated less than a 10 minute walk to the Anglia Ruskin University Cambridge Campus and opposite Compass House, part of Anglia Ruskin University (Computer Sciences) lecture facility. The city centre is within a short walking distance and the revitalised Grafton Shopping Centre is almost opposite Brunswick House.
The direct let property, which was is 100% let for the 2017/18 academic year, has a large common room and laundry facility at ground floor level, as well as comprehensive bicycle storage at basement level and within the enclosed, landscaped courtyard.
This is Apache Capital’s third student accommodation scheme disposal for its Social Infrastructure platform, its second to have set a new market yield level in its respective class following Paris Gardens, Southwark in February 2015.
Apache Capital has formed a joint venture with Harrison Street Real Estate Capital that, with additional investment from National Farmers Union Mutual Insurance Society Limited and Apache Capital, intends to fund the development of up to seven premium build-to-rent schemes across England and Scotland.
The New Platform has successfully closed and recently began construction on the first of these build-to-rent development schemes, The Lexington, which is located in Liverpool, The New Platform intends to invest on an asset-by-asset basis as construction of the other six Phase One schemes are brought forward over the next 20 months. The seven schemes in Phase One include properties in Birmingham, Edinburgh, Glasgow, Liverpool, Leeds and London (two assets).
The Lexington represents Harrison Street’s and NFU Mutual’s first BTR transaction in the UK, underscoring that build-to-rent is developing into an institutional asset class as investors are attracted to its defensive, counter-cyclical qualities.
Apache Capital and its development partner Moda have created within four years one of the largest UK premium build-to-rent portfolios worth £2 billion, today comprising over 6,000 homes across 10 schemes secured in prime city centre locations. Apache Capital and Moda’s £154 million flagship Angel Gardens scheme in Manchester’s NOMA district will open mid-next year and has been full funded by Apache and is not part of the Phase One portfolio. Apache Capital and its development partner Moda are continuing to identify and acquire development land to further expand its £2 billion build-to-rent portfolio.
Apache Capital Partners and Audley Group, the UK’s leading provider of luxury retirement villages, are pleased to announce that they have formed a new joint venture to deliver a 13,750 sqm luxury retirement village on Nightingale Lane, overlooking Clapham Common, London. The scheme has a gross development value of £125 million.
The scheme, situated on the site of a former police station and already with the benefit of a planning permission secured by Apache Capital, will deliver one of the first retirement village in central London, providing excellent transport links and with a wide variety of shops and amenities nearby.
Construction is anticipated to commence by mid 2018 with completion expected in 2020.
Apache Capital, with joint venture (‘JV’) partner Moda Living, bought the site ‘off-market’ from Grosvenor Britain & Ireland. The JV will design, build, and manage the new Build-to-Rent homes for the long term alongside the existing homes under the Moda brand. Grosvenor identified Moda for its expertise in Build-to-Rent and their ability to guarantee delivery through their backing from Apache Capital. The deal secures the main residential component in the Fountainbridge regeneration, which is helping revitalise central Edinburgh.
The scheme will be Moda & Apache’s second in Scotland, having purchased the former Strathclyde Police headquarters in Glasgow in October last year, with a view to deliver the city’s first homes purpose-built for rent. The £115m redevelopment will see the complex transformed into c. 400 apartments coupled with on-site amenity areas and new commercial space.
Apache Capital Partners announces that it has sold a prime freehold portfolio of three care homes in South East England locations to MedicX Healthfund II, a leading UK healthcare property investment fund managed by Octopus Healthcare, for £28 million. Apache Capital acquired the sites in the summer of 2013 and fully funded the development of three high-quality, purpose-built care homes. They comprise a total of 173 beds and have all been constructed, on time and on budget, in the past two years.
The properties are operated by the Maria Mallaband Care Group, a major care provider in UK, on separate leases with over 33 years unexpired and annual RPI-linked rent reviews. All the properties are located in affluent South East England locations, including Gerard’s Cross, Bisley and Canterbury, attracting self-funding residents. Strutt & Parker and Knight Frank advised Apache Capital Partners on the transaction, which represents a total investment of approximately £28 million. Octopus Healthcare has committed in excess of £370 million to elderly care homes and specialist healthcare premises since 2010.
Richard Jackson, Co-Founding Partner, Apache Capital Partners, said: “We successfully generated very attractive ungeared returns ahead of our geared forecast for our investors by developing, stabilising and selling the MMCG portfolio. This is in line with Apache Capital’s strategy of investing and developing early into alternative sectors to create institutional-grade bespoke portfolios of scale, before exiting to institutional investors. Despite ongoing market uncertainties due to Brexit, this sale reinforces our investment focus on sectors whose performance and occupational demand fundamentals are in part underpinned by limited high quality supply and non-discretionary spend, enabling us to generate stable, superior, long term income. We continue to invest into other opportunities offering superior income and capital growth across the Private Rented Sector, student accommodation and healthcare sectors, including retirement villages.”
Apache Capital Partners and Moda Living announce that, through their Build to Rent (“BTR”) Joint Venture, they have secured planning consent for their £82 million premium purpose-built rental development, ‘The Lexington, Liverpool’, the JV’s first major project in the city. Named after the building’s New York-inspired design, The Lexington forms part of the Peel Group’s £5.5 billion Liverpool Waters regeneration masterplan and overlooks the docks that first kick-started Liverpool’s growth. The scheme will be delivered by Moda Living, a developer and operator of private rented housing, and will be fully funded by Apache Capital, the London and Gulf based private real estate investment management firm.
The 34-storey tower, designed by Falconer Chester Hall architects, will be the tallest residential landmark in the city’s Liverpool Waters area. Alongside 304 high-specification apartments (ranging from studios to one, two and three-beds), there will be 15,000 sq. ft. of dedicated amenity space. With a 17th floor residents’ lounge, gym, roof terrace, garden, fitness studio, an indoor/outdoor cinema and 24-hour managed concierge, The Lexington will raise the bar in Liverpool’s rental market. Unlike other developers, Moda Living and its funding partner Apache Capital will retain ownership of the property and operate it through their JV to ensure the creation of a genuine long-term community and investment platform. The building is the biggest single investment into Liverpool’s property market this year, underlining Mayor Joe Anderson’s commitment to supporting investment and housing.
Apache Capital Partners is pleased to announce today that it is forming a strategic Joint Venture with Moda Living Ltd, itself formed by Caddick Group Plc and Generate Land Ltd. The Joint Venture will plan, develop, deliver and operate a leading premium BTR portfolio, located in prime sites across UK regional cities, with a pipeline of approximately 5,000 units and a gross development value of £1 billion.
Following more than two years of due diligence, this strategic Joint Venture makes Apache Capital the long term funding partner of Moda Living. The partnership is expected to create the largest owner of regional purpose-built BTR and one of the largest owners of BTR overall in the UK. Apache Capital will be the majority partner of the Joint Venture.
The portfolio concentrates on regional centres where population growth and an undersupply of residential accommodation looks set to trigger rental and capital growth over the next few years. A focus on prime locations attracting the ideal tenant profile for BTR developments; 20-44 year olds with disposable income who demand locations and buildings that come with high quality services and amenities.
The seed asset is Angel Gardens, Manchester, located in the centre of the Co-op and Hermes 20 acre Noma masterplan and bordering the vibrant and attractive Northern Quarter. This landmark development includes an iconic Mies Van Der Rohe-inspired 36 storey tower, comprising 458 stylish units, high quality gardens and resident amenities tailored for the Build to Rent sector. In a complex with unparalleled public realm, co-locating retail and high quality bar and restaurant space, Angel Gardens is expected to set the new standard for luxury, contemporary living in Manchester.
Angel Gardens will offer its customers a lifestyle choice not currently available in the city. All Moda Living customers will have exclusive use of all amenities within the building, including resident lounges, a state of the art cinema room and business meeting space. Plus there is a rooftop garden complete with BBQ zones, gym and fitness classes, Yoga and the ‘Multi-Moda’ sport court complete with netball, tennis, basketball and football facilities and a comprehensive range of concierge services.
Richard Jackson, Co-Founder and Managing Director of Apache Capital Partners, said: “We at Apache Capital have seen a strong demand from our Middle Eastern investors in the UK’s Private Rented Sector. This is partly because BTR is already an established sector in the region, the sector’s continuing supply/demand imbalance in the UK, but also coupled with the prevailing lifestyle shift toward flexible living that delivers high quality amenities and services. Following two years of intensive due diligence, we at Apache Capital are very pleased to be forming this strategic Joint Venture with Moda Living,our development and operating partner.
“The 5,000 unit secured portfolio provides us immediate scale and Apache Capital and Moda Living will currently be the largest owner of regional purpose-built BTR and the second largest owner overall in the UK.
“This strategy builds on the success of Apache Capital’s Social Infrastructure investment platform, where we have aggregated an institutional grade portfolio of assets in the student accommodation and healthcare sectors.”
Johnny Caddick, Director of Moda Living, adds: “We’re really pleased Apache Capital acknowledge and understand the vision Moda Living has to deliver a best-in-class BTR product and we are looking forward to delivering our portfolio with them as our strategic partners.
“Traditional views on renting are changing and more people are looking towards BTR for long-term tenure. With this in mind Moda Living’s aspirations are to create lifestyle developments that focus on putting the tenants – our customers – at the heart of the concept. This will ensure we constantly evolve to stay ahead of the market and the changing face of renting as we know it, which enables us to create living spaces that are tailored specifically for city-centric lifestyles.”