LaSalle Investment Management (LaSalle) is seeing increased demand for development financing with banks still reluctant to commit fully to the property sector following the financial crisis. The global real estate investment manager has moved to close the gap in development financing with a series of deals worth almost £100 mln (EUR 115 mln) in the last six months and believes that this is an indication of the growing confidence in the market among some developers.
LaSalle Investment Management (LaSalle) is seeing increased demand for development financing with banks still reluctant to commit fully to the property sector following the financial crisis. The global real estate investment manager has moved to close the gap in development financing with a series of deals worth almost £100 mln (EUR 115 mln) in the last six months and believes that this is an indication of the growing confidence in the market among some developers.
The most recent of these deals is a £40 mln development financing deal with Brookgate, the property development and investment company, for three student accommodation buildings at Anglia Ruskin University (ARU), Cambridge. The deal, which was announced this week, is one of the first institutional funding deals in the student sector outside London.
'This deal demonstrates that we are able to partner with developers to close the gap in financing where there are good quality development opportunities,' said John Yeend, director of LaSalle. 'This is the second major deal we have financed in the last six months and highlights the growing confidence among some developers to seek funding.' LaSalle's purchase price reflects a yield of 7.0%.
LaSalle's financing will enable Brookgate to develop CB1, a 26-acre gateway development on Station Road, Cambridge. The three student buildings will total 140,000 sq ft (13,000 m2) and provide 511 en-suite bedrooms in 112 studios and 399 apartments. In addition there will be 8,800 sq ft of retail space for letting. Construction started this week for completion in summer 2012. Designed by architects TP Bennett, the buildings will be constructed to achieve a BREEAM excellent rating for sustainability.
In addition to student accommodation, the CB1 master plan will provide 600,000 sq ft of commercial space and 630,000 sq ft of residential, plus retail, restaurants and bars. The project also provides a refurbished station concourse and new public square, new transport interchange, high quality hotel and a multi-storey car park. Bidwells advised Brookgate on the transaction, while AHBN represented LaSalle.
