LEGAL & General has revealed it is to fund the development of more than 300 build-to-rent apartments in Glasgow city centre, writes Scott Wright.
In the first project of its kind to be backed by the pensions and investment giant in Scotland, L&G is bankrolling Drum Property Group to deliver 324 flats in the city’s Buchanan Wharf .
The property is being developed in the same waterside area where Barclays is developing its new northern European hub. The bank plans to locate around 2,500 staff at the site.
L&G expects the apartments to have an end value of £85 million.
READ MORE: Clydeside regeneration boosted as £100m flats plan approved
The funding will be seen as a major boost to hopes to develop build-to-rent or private-rented-sector accommodation to ease Scotland’s housing shortage. Last week, planning permission was granted for a £100m project to build nearly 500 apartments in Glasgow’s Clydeside Central Quay.
It was the third build-to-rent property scheme to be approved by Glasgow City Council. Moda Living was given the green light to build 433 rental homes in the former Strathclyde Police headquarters on Pitt Street, while Get Living got the nod for a 700-home project near High Street.
The Buchanan Wharf project represents L&G’s fourth acquisition in Glasgow in the last year.
Last year, it began the development of a new 160-room hotel, acquired the Scottish court and tribunal building Atlantic Quay 3 overlooking the Clyde, and forward funded the Atlantic Square Development to provide a major new UK Government hub.
Dan Batterton, head of build-to-rent at LGIM Real Assets, said: “Glasgow has seen very low levels of residential development over the last decade. This acute supply and demand imbalance has made it an important target for us, demonstrating our commitment to quality asset selection, with sites cherry-picked by assessing needs-based demand to provide long-term, stabilised cashflows for investors.
“With Glasgow predicted to continue to see notable population growth, this latest acquisition is another great example of Legal & General investing in an area with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive long term socioeconomic impact, delivering much needed homes.”
The accommodation proposed by Drum will be spread over two 18-storey towers, where facilities will include a gym, dining space, games room and residents’ lounge, according to current plans.
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