The Aberdeen Standard Pan-European Residential Property Fund (ASPER) has made its first investment in the UK, targeting the Birmingham market. With an investment of approximately €67.7m (£60m), representing an initial yield of 4.25%, ASPER will forward fund the redevelopment of a 10-storey post office building into 259 apartments for private rental. The development is in partnership with Lionel House Developments, a development vehicle of specialist residential property firm Stamford Property Investments.
The redevelopment will deliver a range of high quality one, two and three bedroomed contemporary apartments on Lionel Street in Birmingham city centre. The building is located between the Jewellery Quarter and Paradise Circus development and is a short walk from both the main office and shopping district and the major train stations at New Street and Snow Hill. The new scheme will benefit from high quality shared communal spaces, including a large and well-appointed residents’ lounge and two roof terraces.
Early enabling works are already underway, and the 14-storey development is expected to be completed in the summer of 2021. The apartments will be marketed and managed by JLL. The Birmingham investment is the latest investment in the European residential sector, an area of the market that Aberdeen Standard Investments intends to invest a further €2bn by 2022. It also has ambitions to double its total real estate assets under management from the current level of €49bn by 2025.
Ed Crockett, Fund Manager at Aberdeen Standard Investments, said: “This deal underlines our confidence in the UK private rented sector, which is set to increase by around 24% by 2022. Birmingham is a growing city experiencing high levels of investment over the last few years. Driven by strong underlying economic fundamentals and flourishing employment, the city’s vibrant residential rental market is showing robust supply and demand dynamics, which makes it a natural fit with ASPER’s investment criteria. We are confident that it will be one of the best build-to-rent schemes in Birmingham.”
Uri Goldberg of Stamford Property Investments, commented: “This development is an exciting project for us and our third development in Birmingham. Having worked with the Council to secure planning for the regeneration of this prime site, we are delighted to be partnering with ASI and are looking forward to delivering a quality BTR scheme for them."
