A joint venture between a Dutch pension fund and the investment arm of insurance firm Legal and General will forward fund 135 new homes in the New Bailey area of Salford.
This is their second Salford buyout from English Cities Fund (ECf), which is behind the wider New Bailey regeneration scheme.
The 15-storey tower block – designed by Manchester’s AHR Architects – was granted planning permission in December 2015.
The 110,000 sq ft build will sit next door to a smaller 90-flat tower on the River Irwell, just across the water from Manchester’s Spinningfields business district.
All the flats will be up for private rent.
Construction is due to start this month and is expected to be complete by March 2018.
Both neighbouring blocks will be managed by LGIM Real Assets.
Legal and General Capital has been pumping huge amounts money into Salford developments over the past five years.
It invested £16m in a 90-flat tower block near Salford Central station and took a 50 per cent stake in MediaCityUK from landowners Peel, an investment thought to be worth £200 million.
Read: Peel sells 50% of MediaCityUK to Legal & General Capital
Back in 2014 it stumped up £60 million for the 615-space NCP car park and a 143-bed Premier Inn hotel, the first of these mega-developments on land around the riverside.
Its partner, Netherlands-based giant PGGM manages the pensions of over 2.5 million people worldwide.
This latest addition brings the joint venture’s current pipeline to nearly 800 new homes, with a total capital commitment of over £250m.
Legal & General say they are looking to use this captial to “help address the chronic long term lack of supply of housing and meet the increasing demand for affordable, quality rental accommodation”.
Between them they’re investing £600m into building 3,000 private rental homes across the UK.
The wider New Bailey regeneration scheme has brought big business to Salford.
International law firm Freshfields Bruckhaus Deringer turned heads when they took out a lease for huge 80,000sq ft offices at One New Bailey.
The deal, revealed on SalfordOnline.com back in October, is still one of the biggest inward investment moves in the last 10 years.
Phil Mayall, Development Director at ECf, said: “The investment from LGC and PGGM is further testament to the momentum that is building on site as the scheme progresses at a pace.
“The two Build to Rent developments are the first of their kind to achieve institutional investment in Manchester, which means that real progress is now being made to bring both schemes forward.
“The progress that is taking place on the wider New Bailey development and the surrounding infrastructure is also extremely positive for the area. Improvements to the Ordsall Chord recently commenced in the city.
“Once complete, the Ordsall Chord will connect Piccadilly, Oxford Road and Victoria stations in Manchester for the first time. These much needed updates to the rail network will vastly improve connectivity and accessibility, bringing more businesses, people and investment to the area.”
Bill Hughes, Head of LGIM Real Assets, said: “Successful international comparisons, such as the Netherlands, Germany and US, demonstrate to us that the UK has a long way to go and we believe that through professionalising the private rental sector we are able to encourage better standards across the board.”
