£1bn BTR platform buys planned 51-storey Renaker tower

L&G, Nest, and PGGM have acquired a 494-apartment scheme in Manchester.

Nest, one of the largest pension schemes in the UK, announced last year that it had joined Access Development Partnership, a BTR investment programme that was formed in 2016 by Dutch pension fund PGGM and Legal & General.

The three groups committed a combined £350m for the latest round of the venture, with an ambition to grow the ADP portfolio to £1bn.

The trio’s first purchase is a 51-storey tower within Renaker’s New Jackson neighbourhood, where L&G already owns two towers.

The building is one of a pair currently under construction. One of the towers, Contour, is retained by Renaker and is currently at the 30-storey mark. The tower sold to L&G, Nest, and PGGM is currently known as F1 and is at the six-storey mark.

Planning for the 988-apartment SimpsonHaugh-designed project was approved in 2022.

The ADP partnership will forward fund the 51-storey development, which will offer a mix of one-, two-, and three-bed apartments and 10,000 sq ft of amenity space.

Dan Batterton, head of residential at L&G, said: “This partnership demonstrates how investment from domestic pension schemes, as well as international private capital, can support the UK government’s push to boost investment into productive assets, accelerate growth, and deliver pensions savings.”

Batterton went on to say that L&G had been “highly selective” when exploring potential sites.

“The outstanding characteristics of this development reflect this rigorous and detailed process. With a thriving economy and a rising number of professionals working and aspiring to live in the city centre, the rental market in Manchester is robust.”

Matthew Forward, senior investment manager at Nest, added: “We’re pleased to embark on this new partnership [with L&G and PGGM] with such an exciting project. It’s a fantastic opportunity right in the heart of Manchester, providing much needed, high-quality rental properties for a growing city.

“We look forward to expanding our portfolio with more UK sites, complementing the £3bn we’ve already directly invested in UK real estate.”

Dirk Bootsma, senior investment manager at PGGM: “The acquisition of F1 in Manchester is the next step of our long-term partnership with L&G.

“This is a great example of our ambition and commitment to deliver strong social and financial returns for the participants of Pension fund Zorg en Welzijn (PFZW). We see the social value of realising new, high-quality rental housing as an additional benefit that fits with the investment philosophy of PFZW.”

Daren Whitaker, chairman of Renaker, said: “We are delighted to have reached an agreement on this new and important addition to New Jackson and to build on an already established and successful relationship with L&G. We look forward to delivering this iconic new development and 494 high quality new homes on behalf of the partnership.”

L&G, Nest and PGGM were advised by CBRE.