£41m investment to acquire major build to rent scheme

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Clients of Aberdeen Standard Investments have acquired Clarendon Quarter, a 324-unit residential scheme just outside of Leeds city centre, from Habitus Leeds.

The deal marks the UK’s largest stabilised transaction, for institutional grade, purpose-built accommodation and the first in Leeds.

The scheme comprises the former St Michael’s School (The Court) and a new build block (The Gardens), with a BREEAM rating of Very Good.

The development provides studio, one, two and three bedroom units, including 262 apartments designated for key workers, let at a discount market rent.

The residents benefit from amenity spaces including two residents’ lounges, a gym, cinema room, co-working areas, laundry facilities, communal landscaped gardens and roof terrace.

Ed Crockett, head of UK residential investment, Aberdeen Standard Investments, said: “We’re delighted to complete the purchase of this well designed and well managed scheme in a dynamic and growing market.

“As the first purpose built rental scheme in Leeds it has a strong emphasis on operational design and displays all of the investment characteristics we target – Affordability, Accessibility and Amenity.

“The potential for rising unemployment is undoubtedly a challenge the sector will have to navigate and as a result our strategy has pivoted more towards the affordable end of the BTR market which shows strong risk adjusted performance as well as helping to meet the needs of the wider community. ”

Adam Burney, partner, residential capital markets at Knight Frank, said: “This transaction is a continued endorsement for the BTR sector, which shows outstanding resilience in the current climate, demonstrating the ongoing demand for institutional, residential assets.

“Despite the ongoing market headwinds, occupancy and rent collection remained at high levels at Clarendon Quarter, throughout the acquisition process.”

“The purchase is reflective of the appetite from investors for assets with proven strength of income and social benefits.”

Mike Gorman, head of CBRE’s Northern Development and Residential team, said: “This is an incredible result in the most uncertain times and demonstrates the resilience of the residential sector.

“Clarendon Quarter is the first fully stabilised asset of its kind to trade in the UK, marking the start of the next chapter of the multifamily evolution.

“CBRE has sold £100m of build-to-rent stock into the Leeds market alone this year, signifying exciting times for the Northern residential market.”

Knight Frank advised Aberdeen Standard Investments, with JLL advising on operational matters. CBRE represented Habitus Leeds on this transaction. The scheme is managed by Fresh Property Group.