Nikal plots major PRS scheme

MANCHESTER developer Nikal is embracing the private rented sector (PRS) model with a huge scheme in Birmingham.

The company has submitted an application to Birmingham City Council to vary a 2012 planning consent for Exchange Square at its Masshouse scheme in the city centre.

This will allow it to include around 700,000 sq ft of residential and a 150,000 sq ft hotel. The emphasis of the earlier plan was on office space.

Nikal’s managing director Nick Payne said the firm was looking at around 1,000 apartments across five blocks. It already has consent for the first 230 through an earlier application.

The plan is to create an “exemplary” private rented environment with gyms, cafes, restaurants and concierge service, and it is looking for similar sites in other major cities such as Liverpool and Manchester.

The PRS model has gained momentum this year and involves developers holding on to the units and renting them out, or selling the whole scheme to an institutional investor.

Nikal is still working on the funding but is planning to retain the apartments and has acquired a 50% stake in a lettings firm to bolster its management capacity.

Mr Payne said: “We feel PRS is the way a lot of residential development will take place. We’re working through the way we’re going to fund it and are very optimistic we’ll have funding in place to complete the scheme in its entirety, rather than in phases. And we believe that providing a critical mass of 1,000 units produces economies of scale and will allow us to control the environment and provide a really fabulous urban village.

“We’ll hold on to the apartments and manage them to make sure they’re well kept and well let as opposed to selling them on. We’re looking to buy sites in other cities and we’re exploring sites in Manchester, Liverpool, Sheffield and Leeds where we would roll out the large campus model.”

He added that work will start on site in the second quarter of 2015 if planning consent is granted by the end of the year.