London council is first to announce development deal since govt housing announcement
28-09-2012
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It has selected Grainger, the UK’s largest listed residential property owner and manager, to develop and manage two innovative housing schemes in the borough.
Grainger will redevelop the sites in Hortensia Road and Young Street for mixed tenure housing. Some will be privately sold, some will be affordable housing, but a major component of the development will be purpose built private rental accommodation managed by Grainger for the long term under a 125 year agreement.
The council said that this innovative approach will see it retain freehold ownership of the sites and share a proportion of the long term rental income stream with Grainger. Grainger will also receive a management fee.
It added that this through this arrangement the council will be able to benefit from Grainger’s unique set of skills, derived from its specialist activities as a residential investor, developer, asset and property manager, to bring forward two developments simultaneously with a combined end value of circa £100 million.
In the coming months Grainger will commence a process of consultation on the design of the developments with local residents and community groups, with the intention to submit planning applications in the middle of 2013.
Grainger's offer and track record is directly aligned to the aspirations of the recent government housing announcement, and this model will deliver a substantial development of professional, sustainable and well managed private rented homes, that are in high demand in the local community.
‘These exciting projects come at a very interesting time in the sector, when private rented housing is high on the agenda, as demonstrated by the recent Montague Review and Government Housing Announcement. We are delighted to have been chosen for these projects by such a forward thinking local authority,’ said Andrew Cunningham, chief executive at Grainger.
‘We look forward to working alongside the Council to develop and manage affordable and private homes for sale and rent through Grainger’s unique platform. We anticipate that this could become a flagship project which will be of interest to many other local authorities, private land owners and developers in delivering private rented housing,’ he added.
Will Grant of property consultants Jones Lang LaSalle, who advised RBKC on the deal, said that they received a wide variety of innovative proposals for what are two relatively unique prime development opportunities. Renting is the fastest growing housing tenure in the UK, with millions more expected to enter the private rented sector by 2020. To date the private rented sector has suffered from a lack of large scale investment and an insufficient supply of good quality, attractive rental accommodation attractive to both tenants and institutional investors.
