Funds worth £57m secured for troubled regeneration development
Funding has been secured for a major residential development in central Leeds, bringing to an end five years of uncertainty.
Richardson and Ask Real Estate will receive £57m from Legal & General’s Build to Rent Fund (BTR Fund) and Access Development Partnership – a joint venture between Legal & General Capital and PGGM – for the development of Tower Works, a build to rent (BTR)site in Leeds City Centre.
The site has had a torrid time, having been first approved in 2016 to include 158 homes for private sale, 100,000 sq ft of office space and 20,000 sq ft of retail space.
However, following comments by the Homes and Communities Agency, the predecessor to Homes England, that said the private sale homes posed “unacceptably high-risk and questionable commercial viability”, it underwent design changes.
This was followed by the collapse of the site’s main contractor, Carillon, in 2018.
The site obtained a new planning consent for phase one of the scheme last year, which includes 245 BTR units, however work was further delayed by the pandemic – with Homes England extending the development period of the site.
But following the announcement about funding, work is set to start in the coming weeks with Sir Robert McAlpine as lead contractor.
Once complete, the development will provide two new residential buildings with one, two and three-bedroom apartments to the south of Leeds Railway Station.
Tower Works marks the second BTR development in Leeds city centre for Legal & General, which acquired Mustard Wharf in 2017, and highlights the prospect for rental growth in city.
Together the sites are central to the South Bank regeneration area, and will deliver 500 homes, offering one, two and three bedroom apartments, alongside over 16,000 sq ft of commercial space.
Ben Holmes, real estate director for Richardson added: “Tower Works is one of Leeds’ most exciting residential development opportunities and we are very proud to have secured funding with Legal & General to bring this superb site forward and create much needed new homes for the city.”
Dan Batterton, senior fund manager, BTR, LGIM Real Assets, added: “As Covid-19 drives changes and a fundamental rethink of many areas of the real estate sector, BTR has remained largely unaffected.
“It has delivered stable income returns throughout the crisis, with occupancy, rent collection and demand remaining high.
“In the last two weeks we have let our 1,000th apartment and welcomed the first residents to our Mustard Wharf scheme in Leeds.
“This continued demand further demonstrates the need for homes with functional space to work, alongside convenient access to local cultural and leisure amenities.
“The Tower Works development further strengthens our existing portfolio. Today, it has committed over £2bn in the sector, with nearly 2,000 operational apartments and a pipeline to deliver a further 7,000 apartments by 2025.”
Legal & General was advised by global property consultancy Knight Frank.
