Apache Capital Partners Fund 466 Private Rental Sector Homes in Manchester

Apache Capital Partners Fund 466 Private Rental Sector Homes in Manchester

Property investment management firm, Apache Capital Partners, has teamed with Moda Living to secure senior debt financing of £85m, secured on the Angel Gardens development in Manchester city centre. The development will create 466 private rental sector homes in Manchester.

Deutsche Pfandbriefbank has agreed to a four-year term funding contract for the construction period of the development, which will convert to an investment loan for the rest of the term. The development is set to cost a total of £153m. Completion of the project is set for 2020.

The premium private rental sector apartments will stand 34 storeys tall, making it one of the tallest residential towers built outside London since the 2008 crash. Covering 520,000 sq ft, the Angel Gardens development forms part of the NOMA redevelopment project, regenerating a 20-acre site opposite Manchester’s Victoria station.

Angel Gardens and Beyond…

Angel Gardens, however, is not the only private rental sector delivered by the joint venture between Apache and Moda Living. It will be the first of many private rental sector developments created by the venture. In the pipeline is a total of 5,000 new private rental sector homes across eight cities across the UK, including London and the south east.

Johnny Caddick, managing director at Moda Living, believes the project will “set new expectations for rental housing in Manchester and throughout the UK”.

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Private Rental Sector Homes in Manchester: On Trend

Investing in property in Manchester is becoming a real trend for high profile investors. And the private rental sector is hot property, considering the vast increase in those seeking rental accommodation. It is mainly the young professionals, who are flocking to the city for its huge career opportunities, that make up the bulk of renters in the city. Angel Gardens will be ideally placed for the many employed in the NOMA area, as well as those commuting into Manchester Victoria.

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Continued Increase in UK Property Demand Great News for Investors

Continued Increase in UK Property Demand Great News for Investors

In unsurprising news, RICS has announced that UK housing demand continues to increase. November’s figures show an increase in buyer enquiries by 3% over the previous month (up to 13% in November from 10% in October).

This demonstrates a third consecutive month of increases in the number of prospective buyers on the UK housing market.

“Although there are some signs that the numbers may begin to edge upwards in the new year,” says RICS Chief Economist, Simon Robinsohn. “The combination of macro uncertainty, the on-going supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest. This is significant not just for the housing market itself but also for the wider economy given how much of consumer spending is tied in with home purchases.”

There are no signs that the current UK housing shortage is likely to ease off any time soon. New sales instructions rose from minus 3% to zero in the same period. Seller numbers, therefore, are slightly higher, but not enough to meet the continually strong demand.

Where there is a discrepancy between the sales market and buyer market like this, it implies that more people are either moving direct from rental accommodation, or are first time buyers. The buy-to-let market, however, is still strong, despite stamp duty hikes and tax changes implemented at the start of the 2016-17 tax year.

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UK Property Demand Rises Pleases Investors

All of this, of course, is great news for property investors. With such high demand for housing, and the value of properties still on the rise (albeit less so than in earlier months of the year), the chances of significant gains, in buy-to-let, new development or ‘flips’, are looking good.

Most of the UK is continuing to see an increase in prices, particularly in the North West, where the market is booming. Week after week, we are seeing fresh reports of the continuing rise in popularity of properties in the Manchester area.

This is, in part, due to heavy investment in development of the city’s infrastructure, and an influx of businesses relocating to the area.  These new businesses, bringing fresh jobs to the North West, are further increasing demand, particularly in the rental sector, as young professionals continue to find promising careers in the region.

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Government Promises Investment in UK Property Development

Good News as Government Promises Heavy Investment in UK Property Development

The UK Government has recently announced plans to invest billions of pounds into the creation of new residential UK property development.

UK Property Finance, one of the UK’s leading Development Finance firms, is understandably excited by the news:

“With the Treasury itself providing serious financial support for those in the property development sector,” they state. “It seems that the disconcerting issue of the lack of affordable housing across the UK is finally being taken seriously by those in power.”

The investment plan is expected to assist in the creation of 225,000 new homes across the country, with at least 15,000 anticipated to be ready and habitable by 2020. There’ll be, it seems, a £3bn injection to the Home Builders’ fund, with a further £2bn going directly to residential property developments on public land.

Insufficient Funds for UK Property Development?

However, despite this news, there are plenty of voices in the property development sector who don’t believe the figures to be sufficient to overcome the extent of the housing crisis.

“Although the amount of suggested investment is significant,” UK Property Finance goes on to say. “It still seems to fall short.”

Whilst these steps by the Government are, of course, a step in the right direction, the extent of development simply does not match the volume of population expansion. This is particularly the case for affordable housing, as increasing numbers of people are priced out of the property purchase market altogether.

Without sufficient Government backing, some affordable financial backing tailored to the needs of each development is necessary.

Enter Property Crowdfunding!

Property crowdfunding and peer-to-peer secured lending may just be the answer. Allowing investors to build a diverse portfolio of property investments across a range of property types, as well as smaller financial input requirements, the alternative finance sector is promising. A more diverse variety of investors, from high net worth to private individuals can get together to fund development projects that will help towards providing some of that much needed new housing stock.

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Despite numerous setbacks, from Brexit to tightening on mortgage lending, the UK property market seems to be remaining buoyant, with optimistic reports for the future.

The property crowdfunding and peer-to-peer secured lending market is one of the major players making a significant difference in keeping the property market moving in the UK. It’s this kind of innovation, as well as the perseverance in the face of challenging times, that is key to building a successful future for the UK property market, and the economy at large.

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£40m Manchester Residential Property Development On The Cards!

It was recently announced that real estate and private equity fund manager, Moorfield, has agreed a deal with Manchester-based property development firm, Glenbrook, to deliver a £40m build to rent scheme at Ellesmere Street in Manchester city centre.

The scheme will offer over 200,000 sq ft of accommodation across three buildings, ranging between 8 and 12 storeys.

Construction will take place at the end of July, with completion scheduled for summer 2018.

Moorfield’s Chief Investment Officer, Charles Ferguson Davie, mentioned in a recent CoStar article : “The Build to Rent sector is in its infancy and we are proud to be at the forefront of it. The sector forms a fundamental part of many cities’ wider residential strategies and we intend to develop more schemes across the country and so help deliver much needed housing supply”.

He also stressed that the Brexit vote has caused a lot of uncertainty, especially for property developers and investors, but feels confident that Moorfield’s commitment to the BTR sector has a wealth of exciting opportunities with an aim to build a 2,000 unit platform.

Glenbrook’s director Ian Sherry, also shared his thoughts on the project, he mentioned that he strongly believes the private rented sector will be resilient, a belief which has been underlined by the property developer’s commitment to bring forward over 750 further units which are planning stages across the region.

In addition, Manchester Place’s CEO Paul Beardmore is also confident about the BTR sector in Manchester. He sees the sector as a fundamental part of city’s wider residential strategy and to deliver additional housing.

The gateway scheme which has been designed by AEW Architects, includes a co-working space surrounded by gardens, concierge facilities, a well-equipped gym, basement car parking with car hire facilities plus an abundance of cycle storage.

A Great Time for Buy-to-Rent Residential Property Development!

According to Legal & General, while Brexit might be putting off large-scale personal decisions such as house-buying, at the end of the day, they still need somewhere to live – so the rental sector has huge potential during these uncertain times.

Dan Batterton, the rent to build fund manager at Legal & General recently mentioned in an interview in Architects’ Journal : “We are hearing demand from more people wanting to rent and not wanting to buy. When we look round the world to established build to rent markets, such as the US, the rental sector provides consistent demand to the construction industry regardless of market conditions – it is less cyclical than building for sale.”

He also says that there may also be less competition for land between now and the end of the year because traditional housebuilders are known for pausing land acquisition programmes, which allows BTR investors to make their move.

BTR schemes are known for providing large communal areas and building a sense of community, which is essential for ensuring people stay. Having areas (as mentioned in the Ellesmere Street example) where people can socialise, make friends and will therefore make them rent for a longer period than see before, plus will help drive yields for investors.

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