Development roundup – new BTR schemes in Birmingham and Hertfordshire

Birmingham-based property developer Cordia Blackswan has officially handed over its Hockley Mills site to Legal & General (L&G) and Sir Robert McAlpine following a decision to focus on other 'more strategically aligned' projects.

Cordia Blackswan handled the Hockley Mills site from its inception, successfully guiding the project through the planning and funding process. 

Once complete, Hockley Mills is set to house 395 new Build to Rent (BTR) apartments, as well as 28,000 sq ft of commercial space for leisure and offices across four acres and eight buildings. The site was designed with the local heritage and architecture of the surrounding area in mind. 

The £100 million investment from L&G – one of the biggest players in the fast-growing BTR market - means that the project now has the capacity to proceed to the construction phase, to help create a new living space in the heart of Birmingham’s historic Jewellery Quarter. 

“It’s been a great achievement to get the Hockley Mills project through the tough planning stages, and finding funding for the project,” Marcus Hawley, managing director of Cordia Blackswan, said.

“As part of our ongoing vision, and in alignment with our partnership with Cordia, we will now be focusing on other projects within Birmingham and the Jewellery Quarter. We are now streamlining our focus to our other sites and negotiating the acquisition of several new sites across the city.”

Hawley’s Blackswan Property was recently acquired by Hungarian-based property developer Cordia in what is its first venture into the UK market, and subsequently became Cordia Blackswan. It has now fast-tracked the growth of its team as well as expanding its project pipeline worth £600 million.

Sir Robert McAlpine Capital Ventures (SRMVC) – the development arm of the world-famous construction group – is now going to start development on the project following the £100 million BTR forward fund deal with L&G.

SMRVC have initiated the development with construction work starting on site. L&G, on behalf of its BTR and Access Development Partnership (a joint venture between Legal & General Capital and PGGM), will fund the site at Hockley Mills.

SRMCV’s sister company, Sir Robert McAlpine, was appointed as contractor for the development and started construction on a 37-month programme in January 2021. Over the course of the programme, it is set to deliver 395 one, two and three-bedroom apartments, alongside a new entrance to the Jewellery Quarter train station, 116 car parking spaces and 28,000 sq ft of flexible commercial space for retail, leisure and offices.

John Parnell, project director at SRMCV, said: “This deal demonstrates SRMCV’s significant experience of, and desire to invest in the BTR sector. This scheme will allow us to continue to demonstrate that creating value for people, place and project are central to our business. We are delighted to work alongside Legal & General on this landmark development in the heart of Birmingham’s Jewellery Quarter and hope this will be the first of many projects together in this sector.”

Dan Batterton, senior fund manager of BTR of LGIM Real Assets, added: “We continue to invest throughout the UK and demonstrate the need for homes with functional space to work, alongside convenient access to local cultural and leisure amenities. The Hockley Mills development will deliver high-quality, professionally-managed rental accommodation that can help to address the supply-demand imbalance in Birmingham.”

Mark Bessey, regional manager at Sir Robert McAlpine, also commented: “In an iconic location, and with excellent train and tram connectivity, Hockley Mills is one of Birmingham’s most attractive new residential and commercial schemes. Significantly, our project design reflects the site’s rich industrial heritage. We’re proud to have secured the contract to develop this superb site and look forward to adding it to our successful track record of creating landmark city buildings built for contemporary life.”

In September 2019, PIT attended Sir Robert McAlpine’s 150th anniversary celebrations, where we met a man trying to make eco-villages mainstream.

Boutique BTR brand continues to grow its portfolio

Kooky, which describes itself as a ‘boutique’ BTR brand, has acquired two more apartment blocks as the firm continues to assemble a portfolio of properties in key locations surrounding London. 

Made up of 66 units in total, the two buildings form part of Bellway’s Goodsyard development in Bishop’s Stortford, a town in Hertfordshire right on the border with Essex.

The company has purchased the properties, Blocks A1 and A2, on a 999-year leasehold basis for £20.5 million. Along with its purchase of Buckingham House in High Wycombe towards the end of last year, Kooky has now invested just over £40 million in BTR in the current quarter.

The Goodsyard buildings include 28 one-bed apartments with an average size of 560 sq ft, 37 two-bed apartments of just under 800 sq ft each, and one 1,240 sq ft three-bedroom apartment. 

The apartments are currently under construction and are set to be available for occupation in Q2 2022. As part of the acquisitions, the two buildings will be Kooky-branded, ‘with unique design elements incorporated into common areas to create the boutique feel that is a hallmark of Kooky’s approach’. The company will also take on responsibility for letting and marketing the units.

“Despite the ongoing lockdowns, we are seeing growing demand for the BTR market, especially as more and more people are seeking an opportunity to live on the outskirts of London to gain additional space and a better quality of life,” Howard Crocker, managing director of Kooky, said of the latest acquisition.

“Bishop’s Stortford is the ideal commuter belt town, and its proximity to the capital and Stansted airport are key drivers of demand for wanting to live in this area.

Crocker added: “At Kooky we are not about offering ‘run of the mill’ standard apartments. Our ethos is focused on boutique living and bespoke service; our rental properties showcase dynamic design and a personalised 24/7 service dedicated to our consumers from the point of moving in and thereafter. We are continuing our search to acquire developments in areas similar to Bishop’s Stortford that will help build our Kooky brand as the unique property provider.”

Greg Allsop, sales and marketing director at Bellway North London, also commented: “The forward purchase of Blocks A1 and A2 by Kooky allows us to concentrate on the private sale apartments in the development, confident in the knowledge we have a great partner whose ambition complements our own. Kooky’s boutique approach to the BTR sector is innovative and adds to the overall appeal of Goodsyard.”

In total, Goodsyard comprises five buildings in a prime position adjacent to Bishop’s Stortford station. The development sits just a few minutes’ walk from the town centre, and five miles from London Stansted. 

Kooky’s two buildings in Bishop’s Stortford join its existing apartment blocks in High Wycombe, Staines, Redhill, Whetstone and Mill Hill.

Group increases residential portfolio and income across 2020

The residential lettings and management arm of MCR Property Group, which is backed by MCR Capital, kept all of its developments on track through 2020 and says it has grown its portfolio rental income by £6 million despite the disruption caused by Covid-19.

Started in 2015, the MCR Capital residential portfolio now presides over 1,500 units across the UK, with a further 6,000, valued at £1.5 billion, either on site, in planning or in development.

As a result of this significant growth across the residential arm of the group, MCR Capital is now set to launch an additional portfolio reviewing opportunities for further growth in the coming months.

Overall, the Manchester-headquartered company has completed a further 500 units in the past 12 months, with the additional units all fully let in 2020 and increasing the fund income by £6 million in the same period.

MCR Property Group says its collaborative approach to working with tenants through the unsettling times caused by the pandemic has helped to keep an occupancy level of 98% sustained throughout the portfolio. 

Developments have been completed at seven new sites throughout the UK, including in the Home Counties, the South Coast and Edinburgh.

One of the developments completed last year was Broadwater Apartments in Worthing, West Sussex, which was subsequently fully let. These comprised 78 one and two-bedroom apartments, along with a further development of 77 new homes, Castellum Apartments in Aylesbury, Buckinghamshire.

Both schemes are retained under internal PRS management, bringing the total within the group to more than 1,500.

"I joined the group last year and am delighted to work with a developer that’s strategically focused on the growth of residential lettings,” Stephanie Hilditch, head of living for Regency Residential (north), said.

“In the last year, we have managed to secure hundreds of lets across all our developments, maintaining the occupancy levels of our existing portfolio, as we continue to build our PRS offering.”

Recently, plans were submitted for ‘The Gasworks – New Town’, a mixed-use development of 1,202 homes on a 6.6-acre city centre site that the group says will ‘set the benchmark for energy-efficient and green space living’. The proposed development aligns with Manchester City Council’s £1 billion Northern Gateway regeneration masterplan. 

Becky Ellis, head of living for Regency Residential (south), added: “Despite the challenges the industry has faced throughout the pandemic, we have worked closely with our prospective and current tenants to understand their position and help them through these uncertain times.”