UK real estate development lending platform Precede Capital Partners has joined forces with Japanese financial services group Nomura to provide a £227 mln (€258 mln) four-year whole-loan facility to Downing Living, the residential-focused division of property developer and operator Downing.
The facility will be used to finance the construction of First Street, a multifamily development in Central Manchester.
This deal is the first originated and arranged by Precede Capital since it announced its partnership with Canada’s QuadReal Property Group and concurrent rebrand from Précis Capital Partners in January 2023. The partnership saw QuadReal acquire a significant shareholding in the firm and commit up to £1 bn to deploy into its development loans.
Consisting of 1,790 units across three buildings, the First Street development will be targeted at new graduates and young professionals, with units ranging from studio apartments to five-bedroom shared accommodation. Downing will construct and manage the property, which is scheduled for delivery in March 2025.
The development will have heating provided by air source heat pumps, EV charging points and rooftop solar PV provision. Downing Living is implementing a strategy for the asset to be net zero by 2038 depending on the extent of grid decarbonisation and connection to the Civic Quarter Heat Network, meaning it will be compliant with ‘net-zero ready’ requirement as contained in the Future Homes Standard.
The facility, which is Precede Capital and QuadReal’s inaugural transaction, as well as Precede’s first development loan in the north of England and second jointly provided with Nomura, brings the total value of residential development loans completed by the firm to over £1.5 bn.
George Downing, founder of the Downing group of companies, which owns Downing Living, said: ‘Our First Street development will complete the long-awaited transformation of a key site at the southern gateway to what is one of Europe’s most exciting and progressive cities.’
David Jerrard, Chief Credit Officer at Precede Capital, said: ‘We are delighted to have closed this financing for a high-quality asset and to have provided the Downing Living team with the certainty and backing required to deliver an important project that will help meet the sustained demand for co-living schemes in this market.’
Zhuu Ming Ang, co-head of EMEA Real Estate Financing at Nomura, said: ‘We are pleased to partner with Precede Capital and QuadReal Property Group to finance the Downing Living development. This will help address the significant undersupply of residential units in the city of Manchester especially for underserved single households.’