Manchester resi unlocked by £75.6m forward funding deal
Marco Living and Axis RE have agreed a deal with Singapore-listed real estate company City Developments to fund 1NQ, a 261-apartment scheme in the Northern Quarter.
City Developments, which has paid £75.6m for NQ1, its fourth PRS project in the UK.
The first was CDL’s acquisition of the development site for a 665-unit project in Leeds called The Junction. This was followed by another two acquisitions in 2021 – one by CDL Hospitality Trusts, the group’s REIT associate, a 352-unit forward-funded project in Manchester named The Castings, and the other project by CDL called The Octagon in Birmingham, with 370 units.
Sherman Kwek, CDL Group chief executive, said: “Despite an uncertain macroeconomic environment, our PRS assets have shown resilience and strong growth potential.
“We have continued to scale up our global living sector portfolio to drive growth in our recurring income. 1NQ marks CDL’s first UK PRS acquisition under a forward-funding arrangement, which enables us to secure our investment at a fixed cost, manage our cash flows over the development period and benefit from potential capital appreciation.”
Marco Living and Axis RE secured planning permission for the Manchester development in June 2023. Since then, they have appointed United Living New Homes, a subsidiary of United Living Group, as the main contractor.
Work is due to begin this month and complete in 2026.
Nick Mullins, director at Axis RE, said: “Manchester City Council’s clarity of its strategic approach and direction within this area of the City Centre will now enable us to bring 1NQ to life in what continues to be a particularly challenging economic environment.
“We are excited to be working with CDL and ULG to deliver the project and this deal is testimony to what we can achieve as a company and is another step forward in the long-term regeneration of this part of the Northern Quarter.”
Caroline Lewis, managing director of United Living New Homes, said: ‘“We are delighted to have been awarded this contract to construct 261 build-to-rent homes. United Living strives to create sustainable housing solutions with a positive impact and this development will help address the housing shortage in Manchester.”
The consultants involved with the project include Primas, JMW, Ashurst, Leach Rhodes Walker, TPM, Fairhurst, Crookes Walker, Avison Young, Quantem, Asset Building Control & Jensen Hughes.
CBRE acted for Axis as funding agent on the deal.
Planning for high rise buildings in the Northern Quarter should not be given. It will destroy the vibe that makes the NQ what it is. Another tax grab eyesore filled with chaos is not what the area needs.
By Roberta Upton
Hardly high rises are they?
By Anonymous
Roberta – this is low rise for a CITY CENTRE urban location which is experiencing such growth. Going high doesn’t detract from heritage buildings in any event. What needs to happen is more support for developers to deal with the heritage buildings which are totally unviable to convert – when you get under the skin of them, they’re a totally box of frogs. MCC should create a support fund for the viability gap on heritage buildings and then we can celebrate the old with the new.
By John W