Major investors back build-to-rent development on site of former Glasgow police HQ
A joint venture between Apache Capital and Harrison Street is to fund a landmark build-to-rent (BTR) development in central Glasgow.
To be delivered and managed over a long-term horizon by Moda Living, the Holland Park development will see the former Strathclyde Police headquarters on Pitt Street replaced by four apartment blocks providing 433 homes for rent in total. Demolition works have already completed with practical completion due late 2023.
The investment is the fifth project in the BTR joint venture between Apache Capital, backed by UK insurer NFU Mutual, and Harrison Street.
In addition to Holland Park in Glasgow, current Moda neighbourhoods being funded by the joint venture include The Lexington in Liverpool, The Mercian in Birmingham, New York Square in Leeds, and Springside in Edinburgh, representing a total of 2,322 homes.
Apache Capital and Moda Living purchased the Holland Park site in October 2016. The transaction, which was one of the largest property deals to take place in Scotland after the Brexit result, marked a clear vote of confidence in the Scottish rental market.
As well as creating new homes, Holland Park will provide 15,000 sq. ft. of internal amenities, including communal lounges and health and wellbeing zones.
A further 31,000 sq. ft. of outdoor amenity space will be provided, with the four apartment buildings that form Holland Park to be set around a courtyard open to the wider public during the day.
Moda residents will also have access to landscaped terraces overlooking the Glasgow skyline, while mixed commercial and leisure space will be provided on the ground floor, including cafes, bars, restaurants and co-working facilities.
John Dunkerley, CEO and co-founder of Apache Capital Partners, said: “Alternative residential sectors such as build-to-rent were already seeing increased interest from institutional investors prior to the pandemic thanks to compelling market fundamentals and the promise of liability matching income streams with defensive, counter-cyclical qualities.
“Covid-19 has further demonstrated the resilience of BTR as an asset class, while we continue to outperform expectations at Angel Gardens in Manchester, our flagship UK BTR development with Moda Living.
“Glasgow marks our fifth investment in the platform with Harrison Street and Moda Living and we look forward to seeing the scheme progress alongside our other projects.”
Paul Bashir, CEO of Harrison Street’s European business, said: “Glasgow is a key commercial centre within the UK, with a strong local economy that includes thriving financial services, technology and life sciences sectors. The city is home to a world-class university, renowned culture and attractive leisure scenes, however there is a significant under-supply of high-quality rental housing, with a lack of highly amenitised purpose-built private rented accommodation.
“We are pleased to further strengthen our partnership with Apache Capital, who, together with Moda Living, have emerged as market leaders within UK private rented accommodation and are successfully pioneering a new model of high amenity, high service BTR that will no doubt prove attractive to the UK’s growing number of private renters.”
Johnny Caddick, CEO at Moda Living, said: “As an investor, operator and developer of Next Generation Neighbourhoods, Moda has a track record of adding value to communities and delivering a housing product that locals need. Our residents’ want to live in high-quality, professionally managed homes, with ready access to generous indoor and external spaces. As we enter 2021, the market is showing accelerated growth, with interest from renters in new-build developments located in cities undergoing major regeneration.
“Significant institutional investors are more attracted than ever to the BTR sector, driven by the granular income which has proven its resilient qualities during these uncertain times. The latest investment from Apache Capital and Harrison Street is testament to the strength and quality of the Moda brand and proposition. The BTR sector is currently valued at £9.6bn but predicted to reach £550bn over the next decade, supplying over 1.7m new homes, and Moda Living will remain at the forefront.”