Investec announces it has agreed to provide Southdawn Limited, the development arm of established Private Rented Sector operator and developer Rooms & Studios, with two senior debt facilities, totalling €66.6m (£61m).
The funding assists with the acquisition and development of two Private Rented Sector (“PRS”) schemes in Crawley, Sussex and Sudbury, West London, which will total c. 400 units.
Investec has provided €46.9m (£43m) for the acquisition and first phase development of a vacant 164,000 ft² office block and adjoining 7.9 acres of land, known as Kellogg Tower, in Greenford, Sudbury. Investec initially provided finance for the acquisition of the site in Q4, 2015, and then construction finance for Phase 1, comprising 270 units and 100 car parking spaces, which was started speculatively in May 2016. Southdawn successfully forward sold to Network Homes for €74.2m (£68m) in November 2016. With local access to a variety of public transport networks, including Sudbury Hill Station served by the Piccadilly Line and the local bus network, residents will benefit from quick access into central London and the surrounding areas. Phase 2 will follow in due course.
At Crawley, Investec has provided an €19.6m (£18m) facility for the acquisition and development of a vacant office property, totalling 43,600 ft², into 129 residential units over four storeys. Rooms & Studios is also considering submission of a planning application for additional units. The property is well located for Crawley and both Gatwick and Central London.
Hayley Scott, at Investec Structured Property Finance, commented:“As the Private Rented Sector starts to make a significant contribution to solving the housing shortage in London and the South East, we anticipate future opportunities to fund similar schemes, providing a credible and established client like Rooms & Studios, with whom we have a long standing track record, with flexible acquisition and development financing.The Private Rented Sector market is continuing to mature, driven by changing home-ownership attitudes and an increasing market acceptance of the advantages of this type of accommodation. Record Institutional and private equity investment into this fast growing sub-sector also highlights the potential steady returns on offer, in what remains an uncertain macro-landscape.”
Cyril Ogunmakin, CEO of Interland Group, added: “These two development sites further complement our existing portfolio of high-quality and well-located Private Rented Sector schemes in and around London. The Investec team has a wealth of experience financing complex residential transactions and, as always, were flexible and commercial in their approach, and we look forward to maintaining this strong relationship as we develop our pipeline of projects.”