HBD pauses £140m Birmingham BTR funding search
Henry Boot’s development business HBD has “put its foot on the ball” regarding the funding search for its £140m Neighbourhood residential scheme in Birmingham’s Jewellery Quarter.
The developer acquired planning approval for the 414-home build-to-rent scheme in March this year, located on a former Sytner site.
EG reported in May that HBD had appointed CBRE to seek a forward funding partner for the 2.6-acre site.
Henry Boot’s development business HBD has “put its foot on the ball” regarding the funding search for its £140m Neighbourhood residential scheme in Birmingham’s Jewellery Quarter.
The developer acquired planning approval for the 414-home build-to-rent scheme in March this year, located on a former Sytner site.
EG reported in May that HBD had appointed CBRE to seek a forward funding partner for the 2.6-acre site.
Earlier this year, Henry Boot chief executive Tim Roberts told EG that the developer will “look to forward fund it in the second half of 2023”.
Roberts went on to say that “it does feel as though the investor market is there to fund schemes like this”.
However, four months after launching the site for funding, HBD said it found the funding market is “hesitant”.
Roberts said: “We talked to funders over the summer, on a selective basis and we have decided to put our foot on the ball in regard to funding that.
“It felt like the funding market was hesitant and we weren’t getting the sort of interest that we wanted. We are not in a rush to do it. We own the site and there are some other things we can do with the site.
“In the interim, rents continue to grow and we will think about our funding next year.”
In the meantime, HBD plans to continue working on the planning, detail specification, talking to contractors to get an initial price, and value engineering.
Earlier today, the developer reported that it has earned £179.8m over the six months, up from £144.4m for the same period in 2022, largely driven by land disposals and housing completions.
It garnered £129.3m of property sales led by its land promotion, development, and housebuilding businesses, and spent £3.9m on acquisitions.
Over the next six months, HBD plans to invest in more land acquisitions.
It will also develop more industrial sites, Roberts said: “Industrial seems to be the more balanced market, both in terms of occupier and investor demand.
“In BTR the occupier demand in phenomenal and you will see rents growing by 10%, but the investor market just for the time being has slowed down.
“But investors will be buying BTR’s for generations to come.”
The developer is also looking to venture into suburban BTR, both in its Coventry site and its £1bn Golden Valley Development site which it is developing the first phase of in partnership with Cheltenham Borough Council.
The 200-acre site will provide 3,700 new homes and 2m sq ft of commercial space.
The first phase, delivered by HBD, will be a 150,000 sq ft innovation space that will serve as the new National Cyber Innovation Centre. The second phase, which includes residential elements, does not have a developer in place yet.
Roberts said: “We will hopefully get the funding agreement with the council signed this year, put the planning application in and start development next year.
“The first phase of the campus will be an innovation centre, but the next will be residential. The residential will be a mix of build-to-sell and build-to-rent, and if build-to-rent [is] being done on that campus I can see no reason why Henry Boot should not be doing it.”
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Image from HBD
