£126m debt package supports Circle Square residential scheme

Alderley Edge-based urban regeneration business, Vita Group, has received a £126m debt package towards the development of its Circle Square scheme in Manchester.

NatWest and Santander UK today (October 25) announced they have agreed the package with Vita Group and Greater Manchester Pension Fund, against their build-to-rent apartments development.

The deal assists the refinancing of existing development facilities and enables the reimagining of some of the assets’ social and co-work spaces.

NatWest, which was also involved in the original development financing of the scheme, was appointed as debt co-ordinator on the deal and sought third-party liquidity.

Following discussions with several lenders, Santander was instructed due to its speed and proactivity, agreeing to provide £42m and leaving NatWest with a hold level of £84m.

Vita Group partnered with the Greater Manchester Pension Fund in 2017 as a joint venture to build Vita Living, 683 modern, purpose-built apartments at Circle Square in central Manchester.

The apartments come fully furnished, with utility bills included in the rent, and offer communal amenities such as private dining spaces, lounges, co-working spaces and a gym. Since opening in 2022, the apartments have been hugely successful with renters, achieving close to 100% occupancy.

Michael Slater, chief financial officer at Vita Group, said: “Gaining the backing of these prestigious institutions is of great value for the business and will facilitate the long term development and operational plans for these market leading assets.

“Vita Living performs incredibly well in the market, driving demand from city centre renters and achieving high occupancy rates, as a result, it creates a compelling proposition for investors and funds.”

Gareth Conroy, director at Avison Young, property advisors to The Greater Manchester Pension Fund, said: “After a successful construction programme, which delivered a first-class development, we look forward to the next phase of the project where the early popularity of the apartments will be built upon.

“The project is further evidence of the Greater Manchester Pension Fund’s continued investment within Greater Manchester, helping to stimulate the local economy whilst at the same time providing much needed new homes.”

Damini Lad, vice president of structured real estate finance at NatWest Group, said: “NatWest has a long history of supporting the residential market across all tenures, and we are proud to be playing our part in providing high quality, professionally managed homes for the rental market in Manchester.”

Matt Jones, relationship director at Santander UK, said: “The quality of the Vita Living accommodation is undoubted, and we look forward to additional opportunities to support Vita Group going forwards.”

Addleshaw Goddard and CBRE provided advice for the lenders, Hill Dickinson for Vita Group and Avison Young and Trowers for the Greater Manchester Pension Fund.