A UK build-to-rent joint venture of Apache Capital and KKR has secured £157 mln (€184 mln) in debt funding to finance the construction of Moda Living’s build-to-rent (‘BTR’) neighbourhood in Brighton and Hove in the UK.
The development, consisting of 564 build-to-rent homes, is the first investment to be brought forward in Apache Capital and KKR’s strategic partnership. The partnership will see over 4,000 purpose-built and -designed rental apartments developed by Moda Living in core cities across the UK as part of a £1.7 bn development pipeline.
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.
The announcement marks the second development funding agreement between Apache Capital and BentallGreenOak, with BentallGreenOak having previously provided £80 mln 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.'
Jim Blakemore, managing partner, global head of Debt at BentallGreenOak, said: '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.'
Apache Capital and Moda Living secured the Sackville Road site in 2018. The 564 build-to-rent homes sit part of a wider nine-acre masterplan that includes 260 senior living homes alongside new public realm and mixed commercial space.
