Legal & General has exchanged contracts on its first Build To Rent (BTR) scheme in Scotland as it seeks to meet the increasing demand for affordable, quality rental accommodation across the UK. The company will forward fund Drum Property Group to deliver 324 apartments within Glasgow’s new Buchanan Wharf waterside regeneration area, which will also house the new Northern European hub of Barclays Bank. Consisting of two 18 storey towers, current design iterations include dining space, a gym, a residents’ lounge and a games room. Buchanan Wharf, which overlooks the River Clyde, will also offer a 4,250ft² communal roof terrace and is walking distance from Glasgow Central Station and the International Financial Services District, linked by the Tradeston Bridge.
With a stated commitment to transform UK towns and cities, creating jobs and driving economic growth, Legal & General has identified Glasgow as a key target for regeneration. Over the last 10 years, the city has seen particularly low levels of residential development, compared with other major cities. 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 the company’s fourth acquisition in Glasgow over the last 12 months and will bring Legal & General’s BTR portfolio to 3,700 homes across the country, with ambitions to have 6,000 in planning, development or operation by the end of this year.
Dan Batterton, Head of Build To Rent at LGIM Real Assets, said: “Glasgow has seen very low levels of residential development over the last decade. This acute supply and demand imbalance has made it an important target for us, demonstrating our commitment to quality asset selection, with sites cherry-picked by assessing needs-based demand to provide long-term, stabilised cash flows for investors. With Glasgow predicted to continue 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.”
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. With Glasgow continuing to suffer from a severe lack of homes, we are delighted to be partnering 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, MD Principal Investing at Legal & General Capital, said: “We are delighted to be 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.”
