£215m agreement secures Scotland’s biggest ever build to rent deal
A joint venture between developer Moda Living and investment manager Apache Capital is to deliver 525 new homes for rent in Edinburgh city centre in a multi-million pound deal which will also include the purchase of 46 existing private rented homes.
Property firm Grosvenor Britain & Ireland has sold off the residential element of its major land holding in the Fountainbridge area for £215 million, in what is the largest ever rental housing deal in Scotland.
The joint venture will design, build, and manage the new build-to-rent homes for the long term alongside the existing homes under the Moda brand.
The deal secures the main residential component in the Fountainbridge regeneration, which is helping revitalise central Edinburgh.
Designed by CDA architects, the new housing will sit alongside 25,000 sq. ft. of new build commercial space consisting of shops, bars and restaurants. All residents will have access to 15,000 sq. ft. of on-site amenity space, including a gym, communal lounges, BBQ area and roof terraces with unique views of Edinburgh Castle, as well as fully managed communal gardens including a new public square.
Moda aims to be on-site by end of year, with first phase completed by end of 2019 and all phases complete by end of 2022.
The site already comprises 250 completed homes, including homes for sale, affordable housing for the frail and elderly, serviced apartments, two student residences providing accommodation for over 600 students, and 46 private rented homes.
The scheme will be Moda & Apache’s second in Scotland, having purchased the former Strathclyde Police headquarters in Glasgow in October last year, with a view to deliver the city’s first homes purpose-built for rent. The £115m redevelopment will see the complex transformed into c. 400 apartments coupled with on-site amenity areas and new commercial space.
The joint venture has the largest pipeline of any rental developer, with more than £1.1 billion portfolio of sites in city centre locations across the UK.
Kevin Stewart, minister for local government and housing, said: “This government has made clear its commitment to boosting housing supply across all tenures and we recognise the significant contribution that can be made by a high-quality purpose-built private rented sector. We have taken a range of actions to encourage developments like this to come to fruition and look forward to the benefits of this investment being realised on the ground.”
Tony Brooks, managing director of Moda Living, said: “Our ambition has always been to build a truly nationwide brand, and with two schemes now underway in Scotland, renters across the length and breadth of the UK will soon be able to benefit from our amenity-rich, service-driven offer.
“As an investor, developer and operator we are here for the long-term and aim to knit ourselves into the city’s fabric taking on the mantle and ethos of Grosvenor. We are looking forward to working with the local authority and community groups to help meet a pressing need for rental accommodation in Scotland’s capital city.”
Gerry More, the Scottish Government’s Private Rented Sector (PRS) Champion, added: “The announcement of this major investment in the build-to-rent proposal at Fountainbridge is a substantial vote of confidence in both the Edinburgh property market and the Scottish Government’s plans to create flexibility, choice and affordability in the wider housing sector.
“This kind of purpose-built, high-quality and professionally-managed PRS development can rapidly increase the provision of much-needed new build housing, while at the same time positively transforming the experience of rented accommodation in Scotland for the long-term.”
Burness Paull and KPMG acted on behalf of the vendor, Grosvenor, with Brodies and Rettie & Co acting for the purchasers, Moda Living and Apache Capital.