Legal & General announces that is has exchanged contracts on two adjacent sites in Wandsworth which will combine to deliver its largest Built To Rent (BTR) scheme to date. The scheme has been acquired by the Legal & General BTR Fund, PGGM and Legal & General Capital.
With an anticipated Gross Development Cost of £500 million, the site will be a flagship BTR development in the UK, providing around 1,000 homes and 85,000 sq ft of commercial space. The scheme has full planning consent which includes 35% affordable housing within one of Central London’s most established and popular residential areas.
Demand for rental property has continued to grow in the UK, having increased 34% over the last five years, according to Savills. Due to the supply/demand imbalance in the local area, the latest London Plan identifies that the unmet housing need in Wandsworth has now reached a shortfall of 2,310 new homes per year. Legal & General’s new scheme will be a significant contributor to tackling this shortage, providing purpose-built rental homes with long leases for all ages, demographics and social groups.
Through the creation of a BTR asset class, Legal & General is looking to use its sources of long term capital to help address the chronic lack of housing supply and meet the increasing demand for affordable, quality rental accommodation. Legal & General is uniquely placed to lead the way in this sector, with unparalleled access to investment opportunities, the skills to develop and a diverse pool of capital through pension fund clients and own balance sheet. It has already directly invested over £19bn in housing, infrastructure and small businesses, creating new jobs, homes and communities across UK towns and cities. With this latest acquisition, Legal & General has brought its total BTR pipeline to nearly 5,000 homes across the country, supporting a flexible workforce and productivity growth.
This latest scheme, covering 6 acres and currently comprising home improvement outlets, will represent the first BTR scheme in Wandsworth Town. Located within Zone 2 and adjacent to Wandsworth Town train station, the development will include a new entrance to the platforms and will form part of the major regeneration of the local area.
Legal & General’s first London BTR scheme, Blackhorse Mills in Walthamstow, will open in the Autumn.
Dan Batterton, Head of Build To Rent at LGIM Real Assets said: “This latest acquisition is another great example of Legal & General investing in a location with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive socioeconomic impact. The location is highly desirable for renters and, with 1,000 units planned for the site, demonstrates Legal & General’s ambition to make a real impact on the delivery of new homes within the UK. Representing our largest scheme to date, this flagship BTR development is another step forward towards tackling the severe housing crisis facing both London and the UK, offering homes for all ages and social groups, as well as reduced living costs thanks to economies of scale.”
Paul Miller, MD Principal Investing at Legal & General Capital, said: “As renting continues to become a tenure of choice in the UK, the delivery of high density, high quality developments with vibrant communities is becoming more and more important. To do this, we need to deliver schemes which offer well connected housing options, which are carefully integrated into the public realm, maximising our existing infrastructure and supporting economic growth. This latest development in Wandsworth, our largest BTR acquisition to date, is a perfect example, offering 1,000 new rental homes alongside improving the station infrastructure and offering commercial real estate space to support local businesses.”
Mathieu Elshout, Senior Director Private Real Estate at PGGM, commented: “Our growing BTR venture with Legal & General continues to deliver on our goal to have a positive impact on the UK’s built environment over the long term. As a responsible investor of Dutch pension capital, we are delighted to be partnering with Legal & General on this flagship scheme, delivering quality and affordable homes for elective renters and helping to tackle London’s growing housing crisis.
Colliers Capital and JLL advised on the transactions.