Legal & General has exchanged contracts on its first Build to Rent (BTR) scheme in Scotland.
In a bid to meet the increasing demand for affordable, quality rental accommodation across the UK, Legal & General will forward fund Drum Property Group to deliver 321 apartments within Glasgow’s new Buchanan Wharf waterside regeneration area.
Buchanan Wharf, which consists of two 18-storey towers, overlooks the River Clyde and will offer a 4,250 sq ft communal roof terrace. Current design iterations include dining space, a gym, a residents’ lounge and a games room.
The development is walking distance from Glasgow Central Station and the International Financial Services District, linked by the Tradeston Bridge.
Over the last 10 years, Glasgow has seen particularly low levels of residential development, compared to other major cities – making it Legal & General’s key target for regeneration. Only 517 residential units were completed in 2017, falling substantially short of the 2,500 new homes needed per annum, according to Glasgow City Council.
Buchanan Wharf represents Legal & General’s fourth acquisition in Glasgow over the last 12 months. Last year, the company began development of a new 160 room hotel, acquired the Scottish court and tribunal building, Atlantic Quay 3, and forward funded the Atlantic Square Development to provide a major new UK government hub.
Co-investors Legal & General and PGGM purchased Buchanan Wharf, as well as additional pension fund capital raised by LGIM Real Assets through its open-ended BTR fund. This latest scheme will bring Legal & General’s BTR portfolio to 3,700 homes across the country, with the company aspiring to have 6,000 in planning, development or operation by the end of the year.
Dan Batterton, head of Build to Rent at LGIM Real Assets, said the acute supply and demand imbalance in Glasgow has made it an important target, demonstrating Legal & General’s ‘commitment to quality asset selection’.
“With Glasgow predicted to see notable population growth, this latest acquisition is another great example of Legal & General investing in an area with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive long-term socioeconomic impact, delivering much needed homes,” he added.
Mathieu Elshout, senior director private real estate at PGGM, commented: “As a responsible investor of Dutch pension capital, it is our ambition to build long-term partnerships with prominent UK real estate players to invest in sustainable developments.”
“Our growing BTR venture with Legal & General is delivering on this goal, adding quality stock within key regeneration hotspots across the UK.”
He said that with Glasgow continuing to suffer from a severe lack of homes, PGGM has partnered with Legal & General to enter the Scottish market, investing in a high-quality scheme which will have a positive impact on the built environment over the long term.
Paul Miller, managing director of principle investing at Legal & General, added: “We are delighted to making our first Build to Rent investment in Scotland as part of our ambition to tackle the housing shortage all across the UK.”
“Scotland, and Glasgow in particular, has been a key target for Legal & General as part of our Future Cities Initiative. We are excited to be bringing a long-term sustainable rental scheme to the area to meet the demands of this vibrant and fast-growing city.”