Vista, the PRS JV between Hermes and Countrywide, forward purchases the first phase of Manchester Waters, Trafford from Rowlinson Construction in £23m deal
Vista, the residential property fund established by Countrywide plc, the UK’s largest property services group, and Hermes Investment Management, the £23 billion manager focused on delivering superior, sustainable, risk adjusted returns to its clients – responsibly, has signed contracts to forward purchase the first phase of Manchester Waters, Trafford from Rowlinson Construction for just over £23 million.
The development achieved planning consent in November 2015 for 164 build-to-rent (“BTR”) apartments (totalling 96,547 sq ft) and 105 car parking spaces. It is being developed by Rowlinson Construction, which has acquired the site on long leasehold from Peel Land & Property.
It is Vista’s second largest PRS scheme following the forward purchase of Baltic Village in Liverpool, which exchanged last year. This phase at Manchester Waters will be the first scheme to be developed at Pomona Island, which is located on the south west fringe of central Manchester, and situated within one of the city’s burgeoning residential urban villages. The site also has excellent Metro and transport connectivity to MediaCityUK in Salford Quays and the city centre.
The acquisition of this phase of Manchester Waters is in line with Vista’s investment strategy of delivery of high-quality, serviced, modern build-to-rent apartments in leading regional locations with a high demand for new housing.
Chris Taylor, Head of Private Markets at Hermes Investment Management, said: “The combined strengths and expertise of Hermes Investment Management and Countrywide allows us to deliver extremely attractive UK BTR assets that appeal to both investor’s requirements and accessible living for the local population.
“Manchester is one of the UK’s strongest regional economies and has particularly robust professional and financial service industries helping to continue its growth trajectory. Manchester Waters is therefore a long-term investment for Vista and falls in line with our strategy of focusing on high-quality, new BTR assets across the UK.”
Graham Bell, managing director at Countrywide, said: “The build-to-rent sector is expected to grow significantly over the coming years. Vista, which brings the best of both Countrywide and Hermes Investment Management together, aims to be in the forefront of this growth by forward funding to acquire assets across the UK.
“As the UK’s largest letting and property management company, Countrywide will provide Manchester Waters residents with a professionally managed and customer-focused experience at affordable prices for people living and working in Manchester.”
David Roberts, Managing Director at Rowlinson Construction, added: “I am delighted Rowlinson is delivering the first phase of Peel’s Manchester Waters site, with our partners, Hermes Investment Management and Countrywide. We recognise that there is a huge unmet demand for this type of high quality market rented housing in this part of the city. In response, we have put together a formidable and dynamic partnership to help deliver this exciting project, which will be a great success.”
Vista was established as a joint venture between Countrywide and Hermes Investment Management in October 2014 and, whilst returns cannot be guaranteed, aims to achieve a target investor-level return of 9-10 per cent per annum, net of fees. The Fund currently has a £200 million pipeline, with a target growth of £1 billion over the next five years. Medium term, its expansion targets are between £250 million and £400 million a year.
Rowlinson Construction and Peel Land & Property were represented by their own internal teams respectively.
Rowlinson Construction will start on site in April 2016.