Leading BTR developer secures landmark funding deal
Harrogate-headquartered Moda Living has announced a landmark funding deal for its £216m Edinburgh based build-to-rent (BTR) scheme, despite current Covid market pressures.
The deal by the leading developer, operator and owner of private, build-to-rent (BTR) homes, pushes it’s UK wide pipeline in excess of £2.5bn and 7,500 rent-only homes and demonstrates that sectors such as property are still transacting according to Moda’s managing director Johnny Caddick.
This investment, is the fourth project in the BTR joint venture between Apache Capital Partners and Harrison Street, launched in 2018 and includes investment from NFU Mutual to deliver high quality BTR projects in core cities across the UK. The Edinburgh scheme, known as Springside, will include 476 new homes alongside 48 existing, fully leased studio, one- and two-bedroom apartments and is expected to complete in 2022.
Speaking to TheBusinessDesk.com, Caddick said: “It’s been a bit of blood, sweat and tears, but certain sectors, even property, are still managing to transact.
“It’s a very unprecedented time and this has come around so quickly and it affects every business. But the reason we established Moda in the first place was because of the huge supply and demand imbalance in the market for residential rental stock; and that hasn’t gone away even as a result of Covid-19.
“From a property perspective there are certain asset classes which seem more resilient than other and maybe by a bit of luck if I’m being honest. For example logistics and sheds have benefited from more people shopping online because they can’t go out, but there have been some casualties.
“Built to Rent is about long term stable income for our investors and those fundamentals are still there. So from our perspective, with Moda we have a large pipeline of projects and the current situation might slow things down a bit because of various challenges. But the fundamentals are still there and we’re excited to be delivering on our business plan which is to get more projects on site this year, next year and so forth into the future.
Caddick described why the BTR market was gaining a lot of attention amongst real estate investors particular as you enter a low interest rate environment. He said, “If you have 400 or 500 residential units on a scheme; you’ve got 400 or 500 different tenants and sources of income. And if you look over a portfolio basis say of perhaps 10 to 15 schemes if not more you’ve got a lot of granular income that’s attractive to investors.
“Retail has historically been a pillar of anyone’s property portfolio and that’s on more shaky ground now. I think when people look for that reliability of income, which normally tracks inflation then BTR is seen as a very safe place to put money from an investment perspective.”
Moda is continuing to raise the bar in the UK rental market and is catering for young professionals, downsizers, sharers and families. Offering residents access to a whole host of on-site amenities focused on mental and physical health and wellbeing, such as gyms and ‘wellness’ zones, communal lounges, roof terraces, green spaces, workspace– all included within the rent.
It is also looking to challenges the current market by offering deposit-free, pet friendly renting with secure yet flexible tenancies of up to three years.
Moda opened its flagship 35-storey neighbourhood, Angel Gardens, in Manchester in October as work started on its new 515 home New York Square development in Leeds in October – where it remains on site with sister company Caddick Construction. Further construction is also underway in Liverpool on a 34-storey tower and a 42 storey development in Birmingham. With further projects across the UK in varying stages of design, planning and development, Moda is on target to be opening 125 homes a month by the end of 2021.
