Essential Living has secured a £60m loan from Royal Bank of Scotland (RBS) and HSBC to fund a 249-home development in Greenwich, south London, that the company claims will be the UK’s first modular build-to-rent (BTR) scheme.
The four-year club deal, which is funded equally by RBS and HSBC, will be used to fund the development of Creekside Wharf (pictured).
At 23 storeys, the scheme will be one of the tallest buildings to be developed using offsite construction methods. The development is also unusual in that it is designed exclusively for families. Family-friendly features include buggy storage and an on-site crèche.
A quarter of the flats will be provided at discount market rent (DMR), which is a relatively new form of affordable housing. These flats will be offered from 55% of market rent.
Robert Hill, finance director at Essential Living, said that some of the unusual features of the scheme required “innovative thinking” from lenders.
“An increasingly diverse debt market has enabled us to secure highly competitive terms,” he said. “But the combination of delivering both DMR housing and a project built using offsite methods has required some innovative thinking on the part of RBS and HSBC, for which we are extremely grateful.”
RBS has already worked with Essential Living, funding its first completed BTR scheme, Vantage Point in Islington, with the Homes and Communities Agency’s Build to Rent fund. The bank announced plans to focus on the sector at the start of the year, earmarking £1bn to provide development finance for UK private rented sector (PRS) schemes.
“We believe Creekside Wharf, with its provision of affordable housing and its innovative use of modular construction, will be another standout scheme,” said Chiara Zuccon, head of PRS at RBS.
Darren Wilson, senior corporate banking manager real estate at HSBC, added that long-term demand for PRS housing was “only going to increase” and that the bank was “committed to further supporting the growth of the build-to-rent sector”.
Original link - Property Week
