Essential Living, a developer and operator of homes for rent, has agreed a £60 million loan facility for Britain’s first modular build to rent scheme in Greenwich.
The four-year club deal, funded equally by Royal Bank of Scotland (RBS) and HSBC will finance the development of Creekside Wharf, designed by Assael Architecture. The 249-homes will include a block designed exclusively for families, with innovative buggy storage, noise insulation and an on-site crèche.
A quarter of the apartments will be discounted to accommodate low-income households designated by the local council. Discount market rent (DMR) homes will be priced from 55 percent of market rent and blended in with the market-rented apartments. This will be the first housing development to include DMR apartments, which are now set to be rolled out more widely under plans announced by the mayor of London.
Upon being granted planning consent in July 2015, councillors in Greenwich said it was “refreshing to see a developer think out of the box”. Council leader Denise Hyland commented at the time: “The scheme is highly imaginative and I’m very impressed with the affordable housing offer.”
Essential Living’s first completed build to rent scheme, Vantage Point in Islington, was funded jointly by the Homes and Communities Agency’s Build to Rent Fund and RBS. The club deal financed three initial projects, also including Farrier House in Bethnal Green and Berkshire House in Maidenhead.
At 23-storeys, Creekside Wharf will be one of the tallest residential buildings to be constructed using off-site methods. It won a Project Award for Private Rented Sector Development at the Housing Design Awards and Best Housing Project at the Sunday Times British Home Awards. Both judging panels specifically highlighted its innovative design and the 25 percent provision of DMR homes.
Scott Hammond, managing director at Essential Living, said:
“The market is continuing to grow more comfortable with the emerging build to rent business model, and we are delighted to have finalised the debt position to bring forward one of our landmark developments. Against a backdrop of global uncertainty, we believe the defensive nature of residential investment will become increasingly attractive to investors and lenders.”
Robert Hill, finance director at Essential Living, said:
“An increasing diverse debt market has enabled us to secure highly competitive terms. But the combination of delivering both DMR housing and a project built using off-site methods has required some innovative thinking on the part of RBS and HSBC, for which we are extremely grateful.”
Chiara Zuccon, Head of Private Rented Sector at RBS, said:
“We’re committed to supporting the UK’s housing agenda and building homes that are purpose built for rent has an important role to play in increasing and diversifying the country’s housing supply. As part of our £1 billion allocation to supporting build to rent, we have already part-funded Vantage Point in Islington, a project that has redefined standards in London’s private rented sector. We believe Creekside Wharf, with its provision of affordable housing and its innovative use of modular construction, will be another standout scheme that will greatly enhance the local community and provide much needed rental housing at a range of price-points.”
Darren Wilson, Senior Corporate Banking Manager Real Estate at HSBC Bank, said:
“Long-term demand for private rented housing is only going to increase in London and Essential Living’s position as an innovator and market leader is underlined by this award-winning project. We are delighted to have agreed to co-fund this development loan and are committed to further supporting the growth of the build to rent sector.”