Legal & General has exchanged contracts on its largest build to rent site to date in Woolwich.
This scheme has been acquired by co-investors Legal & General Capital and PGGM, as well as pension fund capital raised by LGIM Real Assets through its open-ended BTR fund.
Dan Batterton, build to rent fund manager at LGIM Real Assets, said: “Macbean is another great example of Legal & General investing in a location with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive long term socioeconomic impact.
“The location is highly desirable for renters and, with over 650 units planned for the site, is of a size which will offer significantly reduced living costs thanks to economies of scale.
“Given the notable infrastructure developments in the area, such as Crossrail, it has been a target location for us to expand our build to rent offering and we remain firmly on track with our growth plans.”
This site, known as Macbean, is Legal & General’s third build to rent scheme in London, with existing developments progressing in Walthamstow and Croydon.
With a total build to rent pipeline of around 3,000 homes across nine schemes countrywide, Legal & General aims to have 6,000 homes in planning, development or operation by the end of 2019.
Located near Woolwich Arsenal Overground Station, this brownfield site has been identified as one of the last development opportunities of scale opposite a Crossrail station, within one of the highest growth areas along the new rail line.
Woolwich is benefiting from intensive regeneration and significant investment in housing, transport, retail and leisure, and has become an increasingly aspirational location.
This brings more demand – according to the government’s Objectively Assessed Housing Need consultation, 3,313 additional homes are required each year in the borough.
The Macbean development will be a significant contributor to this chronic shortage of housing.
Subject to planning approval, the scheme is projected to deliver over 650 new homes, together with 21,000 square feet of commercial space and a new public square.
The development will comprise of both private and affordable rental homes, split between London living rent and discount market rent.
Mathieu Elshout, senior director private real estate at PGGM, said: “As a responsible investor of Dutch pension capital, it is our ambition to build long-term partnerships with prominent UK real estate players, investing in sustainable developments with a positive impact on the build environment over the long term.
“Our growing build to rent venture with Legal & General is delivering on this goal, adding quality stock within areas, such as Woolwich, which are suffering from a severe lack of housing stock, whilst supporting wider urban regeneration.”
James Lidgate, director of housing at Legal & General Capital, said: “As the UK’s population continues to grow and renting becomes a tenure of choice, delivery of high density, high quality developments with vibrant communities is becoming more and more important.
“This latest development, our largest build to rent acquisition to date, is another step forward for Legal & General in its ambitions to tackle the severe housing shortage that the UK is facing, helping to address the significant supply and demand imbalance – both in the Borough of Greenwich and across London as a whole.”
Through the creation of a build to rent asset class, Legal & General is looking to use its sources of long-term capital to help address the chronic lack of housing supply and meet the increasing demand for affordable, quality rental accommodation.
Legal & General is involved in housing creation across the spectrum, backing a fast growing pipeline of over 80,000 new homes over the next five to 10 years to provide high quality, affordable accommodation at all stages of life.
Legal & General was advised by Colliers International on this acquisition.