Singapore real estate group in £75m deal for 1NQ residential development

1NQ Tariff St

Singapore-based real estate company, City Developments Limited (CDL), has acquired a Manchester development in a deal worth £75.6m.

The deal for 1NQ, with Marco Living and Axis Re, expands its UK private rented sector portfolio.

Situated on Tariff Street in the Northern Quarter, the 261-unit freehold project is expected to begin construction this month.

CDL will forward-fund the PRS project.

Planning permission for the scheme was secured in June this year, with full planning permission obtained in October. United Living New Homes, a subsidiary of United Living Group, will be the main contractor for the project.

CDL plans to develop the site into two new-build 10- and 12-storey apartment blocks housing a mix of one-, two- and three-bedroom apartments and two commercial units on the ground floor. The project is expected to be completed in 2026.

Nick Mullins, from Axis RE, said: “Manchester City Council’s clarity of its strategic approach and direction within this area of the city centre will now enable us to bring 1N to life in what continues to be a particularly challenging economic environment.

“We are excited to be working with CDL and ULG to deliver the project and this deal is testimony to what we can achieve as a company and is another step forward in the long term regeneration of this part of the Northern Quarter. Both parties share our vision for the development and the delivery of high quality, sustainable and energy-efficient apartments.”

United Living Group (ULG) has a long and established track record in the construction industry. The company has recently announced a new partnership with Apollo Group, a US-based global asset manager with an AUM of around $600bn. United Living New Homes is currently delivering the 296-unit second phase of Outwood Wharf in Salford.

Caroline Lewis, MD, United Living New Homes, said: “United Living strives to create sustainable housing solutions with a positive impact and this development will help address the housing shortage in Manchester. We look forward to working with Axis RE and CDL and delivering a project which supports the ongoing regeneration of the Northern Quarter.”

1NQ is the CDL’s fourth PRS project in the UK since 2019. The first was its acquisition of the development site for a 665-unit project in Leeds called The Junction. This was followed by another two acquisitions in 2021 – one by CDL Hospitality Trusts (CDLHT), the Group’s REIT associate, a 352-unit forward-funded project in Manchester named The Castings, and the other project by CDL called The Octagon in Birmingham, with 370 units.

The Junction has obtained practical completion for three out of five blocks, comprising 307 units, and has achieved above 90% committed occupancy as at October 2023. The remaining two blocks, with 358 units, are on track for completion by Q4 2023.

Sherman Kwek, CDL group chief executive, said: “Despite an uncertain macroeconomic environment, our PRS assets have shown resilience and strong growth potential.

“We have continued to scale up our global living sector portfolio to drive growth in our recurring income. This year, our group’s global PRS portfolio has grown by almost 70% to 4,489 operational and pipeline units in the UK, Japan, Australia and the US, up from 2,640 units last year.”

He added: “1NQ marks CDL’s first UK PRS acquisition under a forward-funding arrangement, which enables us to secure our investment at a fixed cost, manage our cash flows over the development period and benefit from potential capital appreciation.”

The consultants involved with the project include Primas, JMW, Ashurst, CBRE, Leach Rhodes Walker, TPM, Fairhurst, Crookes Walker, Avison Young, Quantem, Asset Building Control and Jensen Hughes.

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