Canadian residential investor Realstar has agreed to forward fund what will be its first purpose-built rental development in London. The company will buy the Newington Butts scheme in Elephant & Castle, that includes 278 apartments for rent, and 179 affordable homes.
The £200 million deal means the stalled project will now proceed, with Mace as developer and builder of the project, which includes a skyline tower of more than 40 storeys. For Realstar, the project adds to its existing commitments in London, which now amount to more than 1,000 homes.
“In essence, we step in and fund the scheme,” said Realstar’s Ryan Prince, speaking to Property Week. “We are the funder and then the take-out owner.” Social landlord Peabody will take over the affordable homes within the development, once they are built.
“It’s a significant moment when an experienced Canadian investor in private rented homes does its first major rented deal in the UK,” commented Richard Blakeway, deputy mayor for housing in London.
The Richard Rogers designed project has been a long time coming. It was awarded to developer First Base in heady pre-recession days, but was mothballed with the recession due to a lack of funds. Contractor developer Mace and Essential Living were appointed by the Greater London Authority in 2013, but failed to agree a way to proceed together.
The delays have allowed the scheme design to be refined. Now, as a pure rental scheme, penthouse flats have been deleted from plans, in favour of more uniform apartments; and the total number of units has been reduced by five, as common areas become more of an issue, rather than squeezing in the absolute maximum number of front doors, the preference when building for sale.