Strawberry Star has announced that it has exchanged contracts on a major residential-led mixed use development scheme in Luton, Bedfordshire.

Located close to Luton Airport, the £260 million scheme on a 6.9-acre site will deliver 685 homes together with a 200-bedroom hotel, retail and leisure facilities, an ultra-modern medical and wellness centre and high quality public space.

This follows the introduction of the developer’s newly-created division Strawberry Star Homes, which will use a mix of traditional and novel construction technologies to build the apartments (including elements of modular homes) at lower capital values suitable for first-time buyers. The starting price for the apartments will be £210,000.

The scheme has full planning consent and work will begin in the autumn this year, with phase one to be completed by the second half of 2021.

Santhosh Gowda, chairman of Strawberry Star Group, described the Luton scheme as a ‘major investment’ which will take the firm one step closer to delivering quality homes at lower capital values for aspiring first-time home-buyers living and working around London.

He said: “This unique investment structure along with the Strawberry Star’s bespoke end-to-end property services in London has created a lot of interest from investors in Asia – particularly Singapore and Hong King – and the Middle East wanting to partner with Strawberry Star in investing into the UK market, making it possible for us to develop and provide the much-needed homes.”

Strawberry Star also announced the closure and successful listing of its investment structure on the International Stock Exchange in Guernsey. Having closed in 2007, Strawberry Star Real Estate PCC Ltd currently holds £40 million equity and is expected to increase to £150 million by the end of 2018. The firm has a target of £500 million equity by the end of 2020 with the majority of the equity being deployed in developing housing schemes around London.

With this, Strawberry Star has an 11-year track record in delivering and managing homes across London – including Sky Gardens at Nine Elms, Hoola at Royal Docks and the upcoming Bronze in Wandsworth and Greenview Court in Southall.

Gowda added: “Luton is an obvious choice for this Strawberry Star Homes scheme. The city offers first class infrastructure, with high speed travel into Central London, easy access to the M1, M6 and M25 motorways, and of course, Luton Airport.”

In 2016, house prices in the town increased by more than 19% and are expected to continue rising. Rental returns are also above the national average, standing at 4.81%.

In January, it was revealed by estate agent Jackson-Stops that Luton is London’s number one commuter town, while in 2016 it launched a 1.5 billion inward investment programme to increase Luton’s appeal to outside investors, businesses, house-builders and potential homeowners.