Developer Westrock has bought a 110,000 sq ft office block in Bedford to convert to apartments for rental. It aims to have the Merton Centre ready for occupation by the end of 2015.
The building was bought for £4.7 million and will be converted to create 160 apartments with over 200 parking spaces, as well as a gym, and retail units.
As a result of the deal, Westrock’s PRS pipeline now adds up to more than 1,500 homes, while the company aims to double its numbers over the next two years. It has to date purchased second hand office sites in a number of provincial towns including Portsmouth, Exeter and Crawley – more details here. The company also recently added Dominic Martin to its executive team.
Private rented investor and developer Westrock has appointed Dominic Martin to its growing management team focused on delivering its portfolio of private rented sector flats in projects around the UK.
Dominic Martin joins Westrock
Martin was formerly one of the government’s PRS Taskforce, and will provide Westrock with strategic oversight of its programme of developments, and operational platform.
Westrock currently has around 1,000 homes under development with a further 1,500 in the pipeline. It aims to build a portfolio of rented homes around the UK worth £2 billion by 2017.
Details of Westrock’s activities so far in the private rented sector were reported by resimarketnews.com here.
Investor Westrock is planning to grow a portfolio of rental apartments in the UK regions worth up to £500 million. In the last two months, the company has acquired seven sites in Portsmouth, Exeter and Crawley – all office buildings capable of being converted to residential.
Westrock’s plan takes advantage of the recent easing of planning rules, which make it easier to convert redundant offices into residential. The permission only runs automatically until the second quarter of 2016, hence Westrock is looking to secure as many other suitable sites as possible, before then. It is looking in preference in the south west, south east and in London commuter suburbs.
The seven sites already procured have the potential to deliver 1,400 flats, after conversion, which could have a market value of £250 million. Westrock’s acquisition director Archie Cowan told Property Week magazine that the opportunity was better outside London, with prices tightening in the capital. “In the regions, an investor can earn an extra 100 to 200 basis points in yield, yet have superior locations in city centres where demand is completely undersupplied.”
The first fruits of Westrock’s strategy will be 60 flats available in the first phase of a conversion in central Exeter, which are due for completion late in 2014. The company expects to announce a brand for its rented homes, in the summer. Looking ahead, it believes it might be in a position to sell on the rented portfolio to an institutional investor, within a three to five year timeframe.