Tag Archives: development securities

London & Quadrant makes major bid to grow PRS activities

Housing association London & Quadrant is planning a major push into the private rented sector, and is looking for investors to support a £1 billion fund to support the growth. The group wants to double its current 2,000 homes a year output, in London and the south east.

L&Q is already partnering to achieve larger scale developments and has already worked with housebuilder Barratt on the Altitude development in east London. It is also working closely with Development Securities on residential developments including the Old Vinyl Factory site in Hayes, where a number of private rental flats are proposed. Currently, L&Q owns or manages around 70,000 homes across the south east, though many of these will be affordable housing  only tenants on local authority housing need lists.

While many housing associations are looking at ways to expand their operations, few are yet active in the private rental market. However, a recent report suggested many are making substantial surpluses, thanks to rising rents, and therefore will be looking to reinvest those profits in further housing ventures.

A L&Q spokesman revealed to the Property Week publication: “We are currently piloting our PRS development with a fund of £250 million. We aim to increase our investment to £1 billion within the next three years.  From year three onwards, a sixth of our total development output will be designated for PRS.”

 

Dev Secs buys Cathedral to create private rented powerhouse

Listed property company Development Securities has agreed a £27.4 million takeover of the Cathedral Group, creating the potential for a major new brand in the private rented housing sector in London. The two have previously worked together on projects, and saw the combination as a natural fit.

The deal adds nine development sites to the Dev Secs portfolio, and brings on board the Cathedral team with its track record of developing mixed use, residential led projects specifically in London and the south east. Dev Secs, being listed on the UK stock market, has stronger access to development funding.

The acquisition means Dev Secs now has seven new sites under its control:
the Telegraph Works in Greenwich
Morden Wharf, Greenwich
The IP Global project in Deptford
St. Mark’s Square in Bromley
The Old Vinyl Factory, Hayes
Circus Street in Brighton
Spirit of Sittingbourne in Kent
There are two further sites currently being acquired, but with deals not yet inked, at The Albany in Deptford, and Preston Barracks in Brighton.

Noted the company in a statement: “Six of the above developments have funding in place to execute the relevant business plans, three have achieved detailed or outline planning consents, and planning applications have been submitted in respect of a further two of these sites.”

Cathedral chief executive Richard Upton commented: “We already have a successful history together through our existing joint venture partnerships at The Old Vinyl Factory and Morden Wharf and our completed development at The Movement, Greenwich. We are confident that the integration with Development Securities will provide a stronger platform as we progress our existing portfolio of developments towards completion, and secure additional projects to further contribute to the growth of the company.”

Dev Secs has been in discussions with housing association London & Quadrant about growing a private rented sector portfolio together, involving potentially six sites around London, and up to 800 homes – details here.

In January, Dev Secs hired agent JLL to look for a development partner – details here. It is unclear whether the combination with Cathedral means it will now no longer look for additional partners to work with.

Among Cathedral’s projects is a private rented sector development in Deptford, south east London. This was recently forward sold to investor IP Global – details here. It would appear that, in this instance, Cathedral had insufficient access to funds to develop the project and retain it, instead relying on an advance sale to IP. Now, with the greater access to funds that Development Securities provides, it is likely that similar projects will be developed and retained within the group’s private rented sector portfolio.

 

L&Q tipped to link with DevSecs for major PRS projects around London

Housing association London & Quadrant looks to be close to partnering developer Development Securities in creating a £200 million portfolio of up to 800 private rented homes on several sites in greater London.

Development Securities revealed in January that it was looking for a joint venture partner, potentially the first step in the creation of a larger private rented sector housing portfolio. Now, according to a news report by Property Week, London & Quadrant is preparing to sign up to help create the portfolio. Agent JLL is advising the developer on potential partners.

The developer, well known for its sometimes adventurous stance in the market, has purchased a number of sites with planning permission for homes. Those that might be included in the deal with L&Q include:
Market Place, Romford with 91 flats in two phases
399 Edgware Road, a site with permission for a mixed project including 183 homes
Valentines House, Ilford, which could be redeveloped to include 110 homes
The Old Vinyl Factory, Hayes where 200 flats could be built
Shepherds Bush Market, with potential for 120 homes
Cross Quarter, Abbey Wood with 140 flats
Development Securities has previously said it was considering how to get the best outcome from its sites, noting in a past market report: “This could include land disposals, joint ventures or direct development as a means to extract maximum value from our portfolio. The growing private-rented sector could also provide a strategic option for us in the delivery of the consented residential element of some of selected schemes.”

London & Quadrant has its hand on nearly 70,000 homes in London and the south east, but has yet to get involved actively in the private rented sector, in contrast with some of its more adventurous housing association peers.

Last September, the housing association indicated its interest in the private rented sector, when it sponsored a research report delivered by the Centre for London, called Stressed, a review of London’s private rental sector. At the time, L&Q’s Susi Schafer said: “We sponsored this report in recognition of the growing role of the PRS and the need to better understand the challenges faced by the sector. We believe L&Q and other housing associations have an important role in growing and improving PRS.”