UK: A JV of Apache Capital and KKR has secured a £157 million debt facility from BentallGreenOak to fund a Moda Living BTR development in Hove.
The development, consisting of 564 homes, is the first investment to be brought forward in Apache Capital and KKR’s strategic partnership. The partnership will see more than 4,000 purpose-built and -designed rental apartments developed by Moda Living in core cities across the UK as part of a £1.7bn development pipeline.
The Hove development sits in a separate strategy to the Moda and KKR Select platform that was announced recently.
The debt facility provided by BentallGreenOak will fund the construction and stabilisation of Sackville Road. Construction works have already started on-site, with completion expected in early 2024.
Today’s announcement marks the second development funding agreement between Apache Capital and BentallGreenOak, with BentallGreenOak having previously provided £80 million to finance the delivery of Moda Living’s Glasgow build-to-rent neighbourhood, Holland Park. BentallGreenOak had also helped Apache Capital finance a number of site acquisitions prior to this.
John Dunkerley, co-founder and CEO at Apache Capital said: “The size of this facility matches the scale of our ambition and will help deliver one of the UK’s largest single build-to-rent schemes. Build-to-rent, including both multi- and single-family housing, was attracting increasing interest before the pandemic, with investors and lenders looking to grow their exposure to asset classes underpinned by long-term demographic and structural trends. Now, with a higher inflationary outlook in the short to medium term, we expect build-to-rent to attract further interest as investors look to access real estate sectors better positioned to capture rental growth. Today’s announcement builds on our already strong relationship with BentallGreenOak, who we see as a long-term partner and are keen to explore further opportunities with.”
Jim Blakemore, managing partner, global head of debt at BentallGreenOak, said: “We are pleased to be supporting Apache Capital and KKR with the delivery of the joint venture’s build-to-rent pipeline with Moda Living. Covid-19 demonstrated the resilience of build-to-rent relative to other asset classes and we continue to see further opportunities in the living sectors and a unique opening for non-traditional lenders such as ourselves to step in and provide funding that will help unlock much needed new housing.”
Tony Brooks, managing director at Moda Living, said: “Our Hove neighbourhood is going to raise the bar for rental living in the city, providing 564 state-of-the-art build-to-rent homes on a fantastic central site near the train station. The funding from BentallGreenOak will help enable the regeneration of a long-dormant brownfield site and deliver hundreds of high-quality homes for rent that will be unlike anything currently available in the Brighton and Hove rental market.”
Apache Capital and Moda Living secured the Sackville Road site in 2018. The 564 build-to-rent homes are part of a wider nine-acre masterplan that includes 260 senior living homes alongside new public realm and mixed commercial space.
Residents of the build-to-rent element, which will be managed under the Moda Living brand, will benefit from access to a wide range of on-site amenities and additional services, all-inclusive within the rent.
