London Square and Moda team up on Royal Mail BTR
London Square and Moda Living have joined forces to buy the final sites at Royal Mail’s Nine Elms Parkside, SW8.
A deal would see the first central London scheme from build-to-rent giant Moda Living, following expansion in the regions in partnership with Apache Capital.
It would also be the first BTR acquisition for London Square, which has sought to diversify its business with an affordable housing arm, partnerships and block sales to BTR funds.
London Square and Moda Living have joined forces to buy the final sites at Royal Mail’s Nine Elms Parkside, SW8.
A deal would see the first central London scheme from build-to-rent giant Moda Living, following expansion in the regions in partnership with Apache Capital.
It would also be the first BTR acquisition for London Square, which has sought to diversify its business with an affordable housing arm, partnerships and block sales to BTR funds.
London Square, backed by Ares Management, will acquire the three parcels to develop as a BTR scheme operated by Moda Living. Savills brought the schemes to market at the end of 2019, attracting bids of around £100m.
The sale of sites E, F and G, comprising 759 flats, would mark an exit for Royal Mail more than a decade after it first worked up plans for residential development at the former delivery office and mail centre.
Royal Mail appointed architects Allies and Morrison to work on proposals for the site in 2008. An outline consent for 1,950 homes was granted in 2012, the same year that the mail centre ceased operations, with the delivery office closing in 2017.
The 14-acre central London site was valued at £662m at the 2014 peak of London’s residential boom. After a sale to Ballymore fell through in 2015, Royal Mail split the site up for individual sale, with each parcel ultimately going to BTR developers and investors.
In 2017, Greystar bought plots B and D, with planning for 894 homes, for £101m. Galliard then acquired plot C, with consent for 262 homes, for £22m with forward funding from Mitsubishi Real Estate for a BTR scheme managed by Europa Capital.
Last year, Quadrant and AIMCo acquired a £150m office scheme at the north-west corner of the site, which had originally been intended for residential use.
This now leaves the final three sites: plot E with 297 flats in four buildings of between nine and 12 storeys; plot F with 276 flats across three buildings of up to 15 storeys; and the final building at plot G with 186 private flats over 22 storeys.
There has been intense competition, with several names linked to the final sites including previous buyers Greystar and Galliard, the latter being the frontrunner until early last year.
A deal will come as London BTR investment continues to soar but development slows. Last year BTR investment surged 30% to some £3.5bn, boosted by major deals in the capital including AXA IM’s £800m purchase of Dolphin Square and QuadReal’s £570m acquisition of Realstar’s portfolio with most assets in the capital.
During the pandemic wary investors have tended to stick to the established market in the capital. The biggest deals saw built stock trading, but, with limited land, new development has been squeezed.
All parties declined to comment.
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