Dev roundup – strategic partnerships and steady project progress

17 February 2021 | Investment

Formed in August 2019, the joint venture aims to develop four ‘best-in-class’ retirement villages with over 500 units in total, representing a total value of £400 million. The development in Cobham marks the third project undertaken by the joint venture.

The loan represents the first underwritten by Silbury Finance in the retirement living sector. Silbury Finance is backed by Oaktree Capital Management and launched in January 2021 to provide bespoke senior development finance solutions for property professionals active in the undersupplied UK residential, retirement and student accommodation sectors. 

Domas Karsokas, senior investment manager at Octopus Real Estate, comments: “We are really pleased to be working alongside our joint venture partners and Silbury on what promises to be a market-leading UK retirement living development. The structure and terms of the debt sit well with the key feature of a retirement community development and will support returns to our institutional investors.”

“The last year has shown the retirement sector to be a key resilient asset class within the alternative real estate sector. Customer sentiment has gone from strength to strength and we are thrilled to be able to proceed with another project that will go some way to fill the demand for this type of housing.”

Gary Burton, chief financial officer of Audley Group, adds: “The strength of the retirement sector has never been more apparent than in the last year. While the pandemic has negatively affected many real estate asset classes, retirement villages have never been in more demand. The model has proven hugely effective at keeping older people safe and supported in their own homes.”

“We are delighted to be working with Silbury on Audley Fairmile, another village in our already successful joint venture partnership with Octopus Real Estate and Schroders. Continuing to accelerate our growth means that we can provide much-needed units to the market swiftly.”

Gavin Eustace, founding partner of Silbury Finance, says: “This is a landmark transaction for Silbury as we target £500 million of lending this year, in a sector where we have significant experience financing schemes. The UK retirement living space is one of our high conviction calls due to its nascency and the associated reluctance of more traditional lenders and debt funds to underwrite mid-size development loans for experienced developers.”

“We look forward to working alongside two highly credible counterparties in Audley and Octopus Real Estate to deliver this scheme, which we hope marks the start of a long-term relationship.”

Strawberry Star and JJR to deliver 2,000 homes by 2025

Property developer Strawberry Star Group has announced a long-term partnership with Irish construction giants J.J. Rhatigan & Co. (JJR) to deliver 2,000 new homes by 2025.

The exclusive alliance is the first of its kind for both firms on this scale, enabling JJR to expand its reach in the UK residential sector whilst strengthening Strawberry Star’s ambitious housing commitment.

JJR are currently Strawberry Star’s construction partner for its flagship project LU2ON, delivering phase one of the £280 million residential-led mixed-use scheme by spring this year. The construction firm now brings its expertise to Strawberry Star’s remaining portfolio of projects, which include LU2ON phase two, as well as schemes in Harlow, Wembley and Kenton. The gross development value (GDV) across all four schemes is expected to exceed half a billion pounds.

Santhosh Gowda, chairman of Strawberry Star, comments: “It was a natural fit for us to partner with a construction firm with a track record of delivering excellent quality housing whilst using some of the best sustainability practices in the sector. The trust established between our two businesses based on LU2ON’s initial success has led us to take this relationship to the next level.”

“By forging this long-term alliance, we can leverage each other’s strengths wherever necessary and significantly enhance our delivery capabilities. The partnership will shape our business for the future.”

With 1,000 units already planned or under construction, Strawberry Star is focusing on the needs of buyers, home movers, buy-to-let landlords, first-time buyers, as well as providing investors with a fully managed buy-to-let experience.

All four of the mixed-use schemes that are underway are set to bring significant regeneration to each area, contributing to the local economy to boost house price growth and entrepreneurial investment.

Santhosh adds: “JJR will play a vital role in realising our volume housing vision; to create 2,000 new homes by 2025 whilst setting new standards in high-quality housing in Greater London.”

Ger Ronayne, chief executive officer of JJR, says: “We have a reputation for construction excellence, and we share Strawberry Star’s vision to deliver much needed mixed-use schemes that everyone can be proud of.”

“This partnership has evolved from the excellent working relationship and mutual trust we have established with Strawberry Star over the past two years, particularly on the LU2ON project and will provide a strong pipeline of work for J.J. Rhatigan & Co. in the Greater London area over the next few years. This will provide a springboard for us to grow our business even further in the UK and particularly in the Greater London area.”

“This is the type of collaboration we strive for at J.J. Rhatigan & Co. with all our clients and ultimately it will be mutually beneficial to both our clients and ourselves,” he concludes.

Latest progress on Liverpool’s Kingsway House revealed

Signature Living, which is converting the vacant 1960s six-storey office building into residential accommodation, has completed 75% of the project despite the challenges created by the coronavirus pandemic.

This includes the recent completion of the two-storey roof extension of the building on Hatton Garden between Dale Street and Tithebarn Street.

The two-floor roof extension has been constructed using a lightweight steel framing system, which sits atop the existing structure. The extension will be covered in non-combustible cladding, however, the existing building retains the original brick face façade.

Additionally, all of the 117 studio one and two-bedroom apartments have already been sold to individual owners, with around 40 of them now complete.

The progress report comes as Signature Living anticipates planning permission later this month for a further 17 units in the undercroft of the building. A further planning application will be submitted later in the year for three more apartments in the roof of the building.

Dev roundup – strategic partnerships and steady project progress

Lawrence Kenwright, owner of Signature Living, says: “Throughout the disruption of 2020 work has continued on the conversion of Kingsway House and we have made good progress despite having reduced staff numbers because of the pandemic.”

“Bringing the building back into use after a number of years of lying vacant is vital to Liverpool’s ongoing regeneration and will help to reanimate this part of Liverpool’s business district, adding to the mix of residential accommodation in the city centre.”

He continues: “We are delighted that the apartments have proved so popular and all been sold off plan and, subject to further planning approval we hope to complete the whole building by the second quarter of 2021, with just the 17 additional apartments to deliver if our planning application is successful later this year.”

Since December, Signature Living has completed and opened two hotels, Rainhill Hall near St Helens and the Dixie Dean on Victoria Street opposite the group’s flagship Shankly Hotel – the subject of a four-part BBC1 primetime documentary series, The Grand Party Hotel in Autumn 2020.

The transformation of the Bankfield Centre, a former City of Liverpool College campus into a luxury apartment block in West Derby village, was announced last month, while the Shankly Hotel in Preston is also progressing well with the former Post Office building’s roof and several bedrooms now completed.

“Hospitality is one of the sectors that has been hit most severely over the last 12 months, so we have had no choice but to work harder in preparation for when we can open up again,” Kenwright adds.

“It’s meant we have had to be resilient and also to innovate, to adapt plans and adopt new ways of working. Change is hard. We have not only had to endure Brexit which clearly decimated the UK’s property funding markets, but also cope with this current pandemic, which quickly followed.”

He concludes: “When we first purchased this building retail and office space were still deemed as very secure investments, but today their values have decreased drastically. However, we have had to embrace it rather than accept a bleak future. Encouragingly, we are seeing the fruits of our labour with some big steps being taken on all of our projects.”

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