Apache Capital Partners and Harrison Street have secured a £80 mln (€90 mln) debt funding to finance the construction of Moda Living’s build-to-rent neighborhood on the site of the former Strathclyde Police headquarters in central Glasgow.
Named Holland Park, the 433-home development is the fifth investment to be brought forward in the Apache Capital and Harrison Street joint venture and will be developed and operated for the long term by Moda Living.
The four-year debt facility provided by BentallGreenOak will fund the construction and stabilisation of Holland Park. Start on-site for the first phase is due shortly, with completion expected in late 2023.
Prior to providing construction financing for Holland Park, BentallGreenOak had helped fund a number of site acquisitions by Apache Capital in core cities across England and Scotland. The company has also previously provided construction financing for Harrison Street and Torsion Developments’ 290-studio student accommodation scheme in Birmingham.
As well as creating new homes, Holland Park will provide 15,000 sq ft (1,400 m2) of internal amenities, including communal lounges and health and well-being zones. A further 31,000 sq ft of outdoor amenity space will be provided, with the four apartment buildings that form Holland Park to be set around a courtyard open to the wider public during the day.
John Dunkerley, co-founder and CEO at Apache Capital Partners said: ‘The backing of one of the world’s leading real estate investment managers for our Holland Park scheme with Moda Living highlights lenders’ growing comfort with build-to-rent as an asset class. Covid-19 has revealed the vulnerability of traditional property investments such as retail and offices to disruption. As a result, lenders, together with institutional investors such as pension funds and insurers, are looking to grow their exposure to alternative asset classes like residential for rent.’
‘Against the backdrop of pandemic-related uncertainty we are seeing across the real estate market, build-to-rent continues to perform well, and we are delighted to be supporting a best-in-class product that Apache Capital, Harrison Street, and Moda Living have created. We see a huge amount of opportunity across living real estate and hotels, and believe that demand for agile and relationship driven debt partners will only grow,’ said Jim Blakemore, global head of debt at BentallGreenOak. ‘As traditional lenders continue to pull back from the market, there will be a huge growth opportunity for alternative providers. With a well-capitalised, global footprint we are able to act quickly and help our clients secure the deals they want and build those relationships over the long term.’
Apache Capital and Moda Living purchased the Holland Park site in October 2016. The transaction was one of the largest property deals to take place in Scotland after the Brexit result.