Legal & General has agreed the funding of a prime Birmingham Build to Rent (BTR) development site known as Newhall Square for a total sum of £53m.
Representing the sixth UK city to which it will bring its new rental offer, this latest investment brings its total pipeline of BTR units to over 1,700.
A forward funding deal has been agreed with residential developer Spitfire Bespoke Homes.
There is currently more capital committed to infrastructure projects in Birmingham than any other European city and the site sits within five minutes’ walk of the new Paradise development, a mixed-use development that will deliver 1.8m sq ft of new office, retail and leisure space, generating 12,000 new jobs.
With a current population of 1.1m, an increase of 100,000 people since 2004, the population growth of Birmingham is the third fastest in the UK, behind London and Bristol. It also has one of the youngest populations in Europe, with under 30s representing around 40%. However, available housing stock is at a record low and is exacerbated by weak levels of new house building in recent years.
L&G is investing around £1bn into the BTR sector, having raised pension fund capital for an open-ended BTR fund as well as a £600m joint venture between Legal & General Capital and PGGM.
Through the creation of a BTR asset class, it is looking to use its sources of long term capital to help address the chronic long term lack of housing supply and meet the increasing demand for affordable, quality rental accommodation.
L&G is involved in housing creation across the spectrum, backing a fast growing pipeline of over 70,000 new homes over the next five to ten years and looking to help provide the UK’s population with high quality, affordable living at all stages in their life cycle.
Dan Batterton, BTR Fund Manager at LGIM Real Assets, said, “Given the huge infrastructure investment in Birmingham, it has been a target location for us in building a high-quality and well diversified portfolio of BTR schemes. We expect to continue adding schemes and new locations over the coming months.”
David Jervis, Managing Director of Spitfire Bespoke Homes, added, “We understand that renting is a now a tenure of choice for many urban dwellers, and recognise that they have high expectations. The traditional buy-to-let market is being overshadowed by the purpose-built rental sector, which is refreshingly focussed on service, high quality accommodation and resident amenities.”