Quintain has agreed a financing package with Cheyne Capital to develop hundreds more homes at Wembley Park.
The UK build-to-rent firm has secured a £172.5m development loan to support the construction of 458 homes south-east of Wembley Stadium.
It is the second loan Quintain has sourced from Cheyne for its Wembley scheme, having borrowed £106m in January 2018. Both deals have been agreed on three-year terms, running until 2021 and 2022 respectively.
The latest deal comes eight months after its owner, American private equity firm Lone Star, withdrew Quintain from sale in September. Lone Star had been holding out for around £2.25bn, but failed to conclude a deal with any bidder, including frontrunner Delancey, which offered more than £2.1bn.
Since deciding to retain Quintain, Lone Star has pushed forward with its rapid build-out of Wembley Park, which has a gross construction budget of £3bn.
So far, 3,100 homes are currently under construction, and Quintain has planning permission to build more than 8,000 in total, with 30% of the homes slated for affordable housing.
Angus Dodd, chief executive of Quintain, commented: “We have capacity within our masterplan to keep developing. We are super-focused on developing the place and making it attractive and engaging.
“We have a big corporate loan and then we’ve had a series of project-level loans, including two loans from Cheyne, a [£65m] loan from Homes England, and we are also refinancing our completed PRS buildings.
“This latest financing is in effect for a bonus project which arose because, instead of having parking off-site, we are now building a big new car park to the south-east of the stadium, which is an alteration to our original masterplan. We have opened up this site for residential use.”
The January 2018 Cheyne funds have been deployed to build a 100,000 sq ft office block, which is 50% prelet to Network Homes, and a 150-unit apartment building on the main Wembley Boulevard west of the stadium.
To date, the 85-acre site has seen more than £1.5bn invested, with Quintain having secured an £800m loan in November 2016 from North American funds.
The loan refinanced an existing £425m facility which Lone Star used to buy Quintain in a take-private deal in 2015.
Dodd said that uncertainty over Brexit has made funding the project considerably more challenging. “Development funding in the current market is tough. I think that we have a robust business plan in the face of Brexit, given that we are still managing to secure financing.
“But I think that what we end up paying for our financing is being negatively impacted by Brexit, as funders are understandably more risk averse than they would be if Brexit had been solved or we were remaining in Europe.”
Quintain bought the land surrounding Wembley Stadium in 2002 for £48m. At the time, it had outline planning consent for 8.8m sq ft of mixed-use development. In 2016, Brent Council approved a new masterplan for Wembley Park which meant it could build the entirety of the scheme for the rental market. It is on track to be the largest single-site purpose-built BTR development in the UK. The result of this will be 85 acres in north-west London under single ownership, with more than 8,000 homes alongside over 1m sq ft of offices and more than 70 shops. The scheme breaks down into five main districts: the “North West”, “Olympic Way”, “North East”, “First Way” and “Eastern Lands”.
While Quintain is yet to complete its first office block, it has already attracted several high-profile retailers. Dodd says that the arrival of Boxpark was “a huge turning point”. The food and drink retailer, also based in Shoreditch and Croydon, launched at Wembley Park in December. The scheme also attracted the first outlet centre to open in the capital, London Designer Outlet, in 2013. “That was a big moment for us, and it has been phenomenally successful,” comments Dodd.