Cain International together with PGIM Real Estate have agreed a development loan of €224.7m (£191m) to finance Union, Vita Group’s new 500,000ft² BTR proposition in Manchester. Located within a wider circa €1.1bn (£1bn) redevelopment site known as St John’s, Union will create 1,676 beds, comprising of 1,545 private rented beds and 131 affordable beds over two tower blocks with a mix of studios, duos, trios and quad apartments. Tower 1 is expected to complete in Spring 2024 and Tower 2 is expected to complete in the Summer of 2025. Cain will provide €174m (£148m) in financing with PGIM Real Estate providing an additional €50.6m (£43m).
Union will offer a host of fantastic amenity space, designed to create thriving communities including a quiet zone library, co-workspace, private dining facilities, an electric pool car programme, bike storage and rental scheme, as well as an events space with a programme run by Vita Group, which will include speaker evenings, live music events, food tasting and book clubs. The second tower will also offer a ground floor food, beverage and leisure offering, anticipated to be open to both residents and non-residents.
The St John’s master plan will offer circa 320 hotel bedrooms, 560,000ft² of office space, 240,000ft² of retail and 13 acres of public realm upon completion in 2025. The site will benefit from strong transport links via its close proximity to Manchester Piccadilly, Deansgate and Salford Central stations, as well as Manchester Airport. The scheme will be delivered by Renaker, one of the leading development and construction companies in the North West of England.
Mark Stott, Vita Group CEO said: “We’re delighted to partner with Cain International and PGIM Real Estate on this outstanding scheme. Union has been designed to mobilise the next generation of young professionals creating a product that provides the perfect blend of amenity, service, and space in a sought-after location and at a price that is accessible. Having financial partners Cain and PGIM Real Estate on board with this project ensures Vita can focus on future developments and growth opportunities.”
Graham Keable, Principal at Cain International, said: “We have been steadily increasing our exposure to key UK markets in recent years, as we find the fundamentals supporting higher education and BTR in UK cities to be highly attractive for our strategy. To that end, we are really pleased to sign our first deal in Manchester. Manchester is the UK’s second-largest city by population and home to its largest financial centre outside of London, with a number of internationally popular universities that feed into the talent pool that choose to stay in the region after graduation. Further, we are very happy to continue our strong relationship with Vita Group, a best-in-class operator in PBSA and BTR.”
Andrew Macland, Head of European Debt at PGIM Real Estate said: “Manchester has been a core market for us over the last 10 years, and we are pleased to be developing in St Johns, a scheme we have seen through the planning stage, since the acquisition from ITV in 2012. Union represents an exciting opportunity for any financier – a prime location mixed with an exciting product delivered by a business with a proven track record for creating stand-out BTR and PBSA. This is our 13th investment with Vita Group and we look forward to working with them again to deliver the Union project.”