Legal & General has agreed to fund a prime Birmingham build-to-rent development for £53m.
Spitfire Bespoke Homes’ Newhall Square scheme in the Jewellery Quarter includes 220 flats and 7,500 sq ft of commercial space.
Grainger had previously been in discussion on the site.
This is L&G’s first foray into Birmingham, and the sixth city it has bought into with its BTR strategy, which now has a pipeline of more than 1,700 homes.
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.”
Spitfire, funded by partner IM Properties, bought the Newhall Street site last October from Birmingham City Council. The scheme has been designed by Associated Architects.
Birmingham is becoming increasingly attractive to residential developers. The first rental operators started moving into the city in 2015 and since then schemes have been agreed by LaSalle Investment Management, Moda/Apache, Atlas/Rockspring, Long Harbour and others.
More recently, conventional housebuilders have come back to the city centre. Berkeley created a Birmingham arm, St Joseph, in early 2016, Barratt recently revealed plans for 800 homes on Bristol Road, and Galliard is involved in three sites.
There is currently more capital committed to infrastructure projects in Birmingham than any other European city.
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.
David Jervis, managing director of Spitfire Bespoke Homes, said: “The traditional buy-to-let market is being overshadowed by the purpose-built rental sector, which is refreshingly focused on service, high-quality accommodation and resident amenities.”
To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette
