Hortons’ Estate Ltd has completed its third and largest investment deal so far this year, with the acquisition of a multi-let industrial estate in Staffordshire. The independent property company has purchased Hixon Airfield Industrial Estate, a former RAF base in Hixon, near Stafford. The site comprises almost 500,000 sq ft
Puma Property Finance (Puma) has today announced it is providing a development facility for Glenmore’s most recent purpose-built student accommodation (PBSA) project in Dundee. The £25 million, 152-bed all-studio accommodation is located minutes away from both the University of Dundee and Abertay University, next to the city centre. The development
Over £1bn of investment opportunities in Greater Lincolnshire and Rutland will be showcased by a collaborative inward investment team at national investor forum UKREiiF. Representatives from Lincolnshire County Council (LCC), Greater Lincolnshire Local Enterprise Partnership (GLLEP) and Team Lincolnshire – a public and private sector group of Lincolnshire ambassadors –
Regeneration firm Urban Splash has signed a new £10m funding deal with Grosvenor Property UK. The deal sees Urban Splash and Grosvenor form a land acquisition partnership that will purchase land assets and work up schemes post purchase. The announcement follows Grosvenor’s recent launch of its £120m residential debt strategy,
The specialist lender Atelier has launched a comprehensive lending framework to finance residential property developments built with offsite and modular construction techniques. The drive marks the first time a major lender has addressed the challenges that SME developers face in financing modular and offsite construction. Research by Savills predicts that by 2030,
Holiday Park Operator Haven and a Blackstone portfolio company, are set to invest more than £170m across multiple sites in the UK in 2023. The expansion follows the continued growth in demand for staycations and includes new activity across its 41 parks. Haven is one of the UK’s most popular
The softwood category started 2023 on a high, with volumes up 12% compared to January 2022, according to the latest Timber Development UK statistics. Softwood imports totalled 426,000m3 in January this year, with volume increases from Sweden, Finland and the Republic of Ireland largely responsible. Despite softwood increases, overall timber
Leading independent property advisory firm, Lismore Real Estate Advisors, released its review of the Scottish investment market for the first quarter of 2023, which focuses on the office sector. With prime yields stabilizing, Lismore forecasts growing interest in prime city centre offices, particularly well-let regional offices in cities with limited
Neinor Homes today announces that it has raised a green loan of 140 million euros with a three-year maturity (2026), demonstrating the company’s creditworthiness and its ability to raise both project and corporate financing. A joint deal has been structured for this financing transaction, backed by Banco Santander, BBVA and
The outlook for construction investment remains challenging, with little or no growth coupled with persistently high inflation creating stagflation, the Building Cost Information Service (BCIS) cautioned in its latest industry report. It found that the dramatic increases in costs of materials were stabilising, but added that products which were energy
Hortons’ Estate Ltd has completed its third and largest investment deal so far this year, with the acquisition of a multi-let industrial estate in Staffordshire. The independent property company has purchased Hixon Airfield Industrial Estate, a former RAF base in Hixon, near Stafford. The site comprises almost 500,000 sq ft of existing industrial space, storage compounds and over 36 acres of land. It is the latest in a trio of acquisitions completed by Hortons in 2023, which combined total £35.65 million. They include deals for Sinfin Commercial Park in Derby and Joules’ Corby distribution centre, which further expand the company’s footprint of more than six million sq ft of office, industrial, retail and leisure properties located throughout the Midlands. Steve Tommy of Hortons, said: “We are very pleased to have completed our third significant investment deal in quick succession. “Hixon Airfield Industrial Estate is a well-established industrial estate with an impressive mix of international, national and local occupiers and complements our growing industrial property portfolio. We are looking forward to working with occupiers and attracting new business to the estate through existing units, storage facilities and potential future development.” Hortons was advised by Ben Roberts of Roberts Real Estate.
Puma Property Finance (Puma) has today announced it is providing a development facility for Glenmore’s most recent purpose-built student accommodation (PBSA) project in Dundee. The £25 million, 152-bed all-studio accommodation is located minutes away from both the University of Dundee and Abertay University, next to the city centre. The development will be Puma’s third with Glenmore and will seek to alleviate a growing under supply of new build stock in the city, particularly amenity rich, studio accommodation. Construction has already commenced on site and the project expects to be completed in time for the start of the 2024/5 academic year. More broadly, this deal comes at a time of increasing demand for student accommodation,[i] with the number of first-year undergraduate students projected to increase and applicants potentially reaching one million by 2030. According to a recent Savills report, there are currently 31% fewer 5+ bed properties listed for rent in Q1 2023 compared with the pre-pandemic average, which has impacted accommodation options for students.[ii] Coupled with increasing demand from international students to study in the UK, PBSA developments are playing a significant role in addressing the demand and supply dynamics across the UK. Eliot Kaye, Managing Director at Puma Property Finance commented: “We are delighted to be working again with our trusted partner, Glenmore, to address the increasing demand for high-quality student accommodation in Dundee which has been historically undersupplied. PBSA is an asset class that we know well, and this development represents our sustained commitment to the sector. Andrew Whiteley of Glenmore Student Property commented: “Ensuring that students have high-quality living facilities is a crucial challenge that must be addressed if we are to enable those who wish to continue their education to do so. Through our continued work with Puma Property Finance, this PBSA development in Dundee will go some way to addressing the shortage of new build accommodation options in the area. Within walking distance from two universities, it will be well placed to serve student demands.” [i] Savills, UK Purpose-Built Student Accommodation Spotlight [ii] Savills, UK Purpose-Built Student Accommodation Spotlight Building, Design & Construction Magazine | The Choice of Industry Professionals
Over £1bn of investment opportunities in Greater Lincolnshire and Rutland will be showcased by a collaborative inward investment team at national investor forum UKREiiF. Representatives from Lincolnshire County Council (LCC), Greater Lincolnshire Local Enterprise Partnership (GLLEP) and Team Lincolnshire – a public and private sector group of Lincolnshire ambassadors – are attending the event in Leeds next week (16 to 18 May). In its second year, UKREiiF is set to attract more than 6,000 delegates from the property industry, with more than 250 UK local authorities in attendance over the three-day event. The Greater Lincolnshire and Rutland inward investment team has ambitious plans for the region and will be sharing investment prospects across its 10-strong sector proposition, including advanced engineering and manufacturing, visitor economy, defence, health and life sciences, digital tech, commercial and residential development, and a particular focus on agri-food, low carbon energy and logistics. Investment opportunities across the region include the South Lincolnshire Food Enterprise Zone, Humber Freeport, hotel sites ready for development, land earmarked for housing, multiple business centres and commercial space and more. Councillor Colin Davie, Executive Portfolio Holder for Environment and Economy at Lincolnshire Council, said: “We saw great value from our attendance at UKREiiF last year and with the event set to be even bigger this year, we need to seize the opportunity to champion our region on a national stage once again. “We are focussed on targeting investors, developers and organisations that can help drive forward our key sectors and our work at the event will contribute towards growing our Greater Lincolnshire and Rutland economy and to create new jobs. “Greater Lincolnshire is such a vibrant place to call home. The lifestyle you can create here with our rich heritage, abundant culture, diverse jobs market and open green spaces and coast, make it a wonderful place to live” The lifestyle in Greater Lincolnshire and Rutland will also play a key part in the team’s promotion of the region as a place to live, learn, work and invest. Andy Gutherson, Executive Director of Place at Lincolnshire County Council adds: “UKREiiF is a fantastic platform for LCC, GLLEP, Team Lincolnshire and our local district councils to speak directly to investors about the unique opportunities we have to offer. Conversations had and connections made at these events are incredibly valuable and make a positive and far-reaching impact on our local economy. “Collaboratively, and as part of Midlands Engine, we will be flying the flag for the region as the place to live, learn, work and invest in and with a busy diary of meets, I’m looking forward to what the team and I can cultivate for Greater Lincolnshire and Rutland.” Lincolnshire excels in food processing and agri-tech and was chosen as one of the Government’s manufacturing zones. This followed growth deal grants of £18 million, including £5.1 million for South Lincolnshire Food Enterprise Zone and £2.4 million for University of Lincoln’s Centre of Excellence in Agri-food and Technology at Holbeach. Ruth Carver, Chief Executive at Greater Lincolnshire LEP said ““This is a good time for Greater Lincolnshire with growing interest in our place and our game changing sectors. Since last year we have made great strides in areas such as town deals, infrastructure development, humber freeport and our business parks. “With many transformational projects taking place, now is a key time to reposition Greater Lincolnshire firmly on the national and global map as an even better place for people to live and work. UK REIF provides a provides a platform for us to tell our story to a global audience once again and we look forward to meeting new connections and investors.”
Regeneration firm Urban Splash has signed a new £10m funding deal with Grosvenor Property UK. The deal sees Urban Splash and Grosvenor form a land acquisition partnership that will purchase land assets and work up schemes post purchase. The announcement follows Grosvenor’s recent launch of its £120m residential debt strategy, led by the investment team in its UK property business. The move signals an expansion of the property company’s regional presence which includes the 42-acre Liverpool ONE destination and a growing regional office portfolio. Speaking of the deal, Urban Splash director Nathan Cornish said: “We are proud to make this announcement and form a new venture, it will allow us to acquire more development sites so that we can add to our ever-increasing pipeline that currently stands at 5,000 homes and 500,000 sq ft of commercial space. “We believe in the power of partnerships and to add Grosvenor to the list is a big moment for us and a further endorsement of the Urban Splash brand and our ability to source and deliver exciting new opportunities.” Rachel Dickie, Executive Director, Investment, Grosvenor Property UK, said: “With a significant need for new homes across the country and a softening in traditional debt markets, we see opportunities to use our experience of residential development to support the delivery of new homes by matching our capital to experienced delivery partners. “Urban Splash has a track record of bringing forward some of the UK’s most innovative regeneration schemes and we are delighted to be able to support them to continue to expand.” Building, Design & Construction Magazine | The Choice of Industry Professionals
The specialist lender Atelier has launched a comprehensive lending framework to finance residential property developments built with offsite and modular construction techniques. The drive marks the first time a major lender has addressed the challenges that SME developers face in financing modular and offsite construction. Research by Savills predicts that by 2030, 1 in 5 of all new homes will be built using offsite or modular construction. While there is widespread acceptance of the new technologies’ transformative potential, developers wishing to build this way have, until now, been underserved by the development finance market. The launch of Atelier’s framework comes after the lender completed an industry-wide consultation with the modular and offsite manufacturing community, including real estate professionals and trade bodies such as the NHBC (National House Building Council) and BOPAS (Buildoffsite Property Assurance Scheme). Atelier has also created a simple guide for SME developers and intermediaries, providing clear lending and eligibility criteria where offsite and modular technology is used. Atelier’s offsite and modular framework will run in parallel with the Carbonlite Challenge, the pioneering sustainable finance solution it created to incentivise developers to build greener, more sustainable homes by offering highly competitive rates of interest. Chris Gardner, Joint CEO at Atelier, commented: “Everyone agrees offsite construction technology has the potential to transform residential property development. But it’s time for that potential to be turned into reality, and that’s why Atelier is determined to help developers build more homes this way. “We’ve collaborated across the construction industry, incorporating the expertise of more than 30 leaders in offsite technology to give developers, intermediaries and contractors a clear and practical guide to the opportunities and challenges that these new ways of building offer. “Above all, we’re working to be the lender of choice for developers who decide offsite is right for them – a trusted, expert partner who understands the technology and can provide reliable finance, a competitive interest rate and ongoing support, right through to the successful completion of their scheme.” Chris Hall, Innovation Services Manager at NHBC, commented: “The potential benefits of offsite construction are clear; consistent build quality, reduced costs and time on site, and strong sustainability credentials. More developers are considering these modern methods of construction, and that’s why Atelier’s lending framework is so timely. By making it easier for residential developers to incorporate offsite technology into their plans, and by providing the finance and support they need to build their schemes successfully, Atelier is addressing market challenges in a clear and concise way.” Terry Mundy, BOPAS Consultant, added: “For all the good work that has gone into raising industry standards in the design, manufacture and installation of offsite construction systems across the UK, one of the challenges that has proven harder to overcome is reassuring lenders to provide finance for such offsite schemes. By introducing its offsite and modular construction lending framework, Atelier is now raising the bar in the development finance sector, to facilitate the positive shift towards modular and offsite construction.” Building, Design & Construction Magazine | The Choice of Industry Professionals
Holiday Park Operator Haven and a Blackstone portfolio company, are set to invest more than £170m across multiple sites in the UK in 2023. The expansion follows the continued growth in demand for staycations and includes new activity across its 41 parks. Haven is one of the UK’s most popular family holiday and holiday home ownership brands. The investment includes a staff recruitment drive, upgrading existing parks and opening new sites across the country in 2023, including Allhallows, in Kent, Thorpe Park, in Lincolnshire and Skegness, in Lincolnshire, both of which are due to open this summer. Haven managing director Simon Palethorpe said the investment would bring “greater employment opportunities and significant economic benefit to the local communities”. The move takes Haven and Blackstone’s total investment in the business to more than £400m. Building, Design & Construction Magazine | The Choice of Industry Professionals
The softwood category started 2023 on a high, with volumes up 12% compared to January 2022, according to the latest Timber Development UK statistics. Softwood imports totalled 426,000m3 in January this year, with volume increases from Sweden, Finland and the Republic of Ireland largely responsible. Despite softwood increases, overall timber import volumes were 8.7% lower than in January 2022. This is due to significant declines in panel product imports, with plywood and particleboard down 42% and 18% respectively. Hardwood imports also dropped by 37% following a record year in 2022. Looking long-term, there is room for positivity, with yearly import volumes around 100,000m3 higher on average than in 2013. TDUK Head of Technical and Trade, Nick Boulton, said: “It is great to see softwood imports on the up once more following a tricky 2022. “This growth is largely attributable to returning construction activity, with recent Department for Business and Trade figures reporting increased RM&I work in early 2023. “These latest softwood figures suggest that normality may finally be returning to the market after a tumultuous few years of Covid, conflict and general uncertainty. “The panel and hardwood sectors are a little further behind, with imports well below 2022 levels. This, however, is due in part to unusually high imports in January 2022 rather than downward market trends. “Looking long-term, the stats paint a positive picture with timber imports consistently on the up since 2013. “This is likely to continue in the years ahead as the UK Government looks to decarbonise the built environment using timber.” Members can read the full statistics report here. Building, Design & Construction Magazine | The Choice of Industry Professionals
Leading independent property advisory firm, Lismore Real Estate Advisors, released its review of the Scottish investment market for the first quarter of 2023, which focuses on the office sector. With prime yields stabilizing, Lismore forecasts growing interest in prime city centre offices, particularly well-let regional offices in cities with limited supply, such as Edinburgh and Bristol. Colin Finlayson, director of Lismore said: “Despite limited supply and challenging conditions for new development, strong demand exists for high-quality office space, which creates opportunities for investors to underwrite rental growth. Yield levels are currently comparable to their long-term averages, making them attractive to long-term investors. Across Scotland, city centre offices show the greatest occupier demand, with potential for refurbishment/repositioning. To stay relevant in the market, retain existing tenants and achieve rental growth, owners of existing assets must invest in improving their ESG credentials and amenities. These improvements are also necessary to maintain liquidity in the investment market.” With an expert view on the market, Andy McKinlay Chair of Ediston Real Estate added: “In the city office markets, supply and demand dynamics are key, in order to achieve investor expectations and development success. The market will become more polarised, leading to a more pronounced pricing differential. “Prime, well-let, new builds with modern occupier-led space and strong sustainability credentials will continue to attract occupiers and trade well. Peripheral buildings can work, but only if repurposed to meet the necessary ESG and wellness credentials, whilst secondary office values need to fall further to reflect post-pandemic demand and capex. Buildings delivered over five years ago are overpriced and lack the necessary ESG credentials.” According to recent research conducted by Lismore, 56% of investors do not anticipate an increase in transaction volumes in the prime office sector during 2023. However, investment managers are more positive, with 56% expecting volumes to increase. However, there are concerns about the quantity and quality of stock being brought to market and the gap between vendor and buyer pricing aspirations. Regarding values, the overwhelming majority of respondents (83%) do not believe that values have fallen sufficiently for added value office space, and they need to see further reductions before revising the sector. An improving debt environment may lead to leveraged investors considering the sector, and those willing to be bold are likely to benefit from discounted deals. The consensus from respondents is that hybrid working is a structural change in working habits, with 56% of respondents expecting it to remain, while 37% expect an increase in the move to work from home, at least for part of the week, over the next year. Businesses are reacting by consolidating their office footprints while providing substantially improved office environments. Looking across Scotland, in office markets in each of the three major Scottish cities is very distinct in terms of occupational demand drivers, and investor sentiment. Edinburgh is benefitting from a broad base of occupier demand, with financial and professional services particularly active currently. This is against a background of low supply, resulting in rental growth. Vacancy rates are low across all grades (particularly in the city centre). This may defer the refurbishment of some buildings which are becoming obsolete, as owners are able to maintain income in a market with low supply. Investor sentiment has settled for prime and investors are actively looking for refurbishment opportunities, though there is a mismatch between sellers and buyers pricing. In the west, Glasgow has traditionally been more reliant on the public sector and corporate occupiers, and both sectors are currently quite inactive on new acquisitions while they work out longer-term space needs. One area of the market that is letting quickly though, is where landlords are offering more flexible and Cat B-fitted options. We expect to see more landlords adopting that strategy as a drive to fill vacant space. With investor sentiment currently being closely tied to occupational trends, the yield gap between Edinburgh and Glasgow has widened and the investor pool is shallower. At an occupational level, Aberdeen is showing genuine signs of improvement. Headline supply levels remain stubbornly high, however, a reasonable proportion of the total supply is effectively obsolete and requires re-positioning or demolition. Good quality stock is gathering letting momentum, both in and out of town and, with the backdrop of little planned new development, dynamics could continue to improve. At an investment level, the city remains low on buyers shopping lists, however, recent transactions such as the sales of Kings Close and Johnstone House provide considerable yield compensation for the more opportunistic and income-focused buyer. The full LISMORE QUARTERLY REVIEW including Research Findings & Expert Views is available to download from: HERE Building, Design & Construction Magazine | The Choice of Industry Professionals
Neinor Homes today announces that it has raised a green loan of 140 million euros with a three-year maturity (2026), demonstrating the company’s creditworthiness and its ability to raise both project and corporate financing. A joint deal has been structured for this financing transaction, backed by Banco Santander, BBVA and JP Morgan, reflecting the financial support and appetite from both Spanish and international banks to invest in the Spanish market. The cost of the loan, including the interest rate swap and savings from the various bond repurchases, is 4.17%, which is lower than the interest cost of the bond issued in 2021 before the start of the conflict in Ukraine, and the rise of inflation and interest rates. The loan allows the company to exercise its right to redeem the outstanding balance of its green bond, the principal amount of which amounts to approximately €143 million following the tender offer launched at the end of February 2023. The redemption is expected to be executed on 27 April 2023. The refinancing marks the first milestone in the company’s new strategic plan, of which one of the main pillars is to focus on shareholder returns with the aim of distributing approximately 600 million euros by 2027. Over the same period, the company plans to allocate more than one billion euros to new direct and indirect investments in order to manage its growth in a capital-efficient manner. Jordi Argemí, Neinor Homes’ Deputy CEO and Chief Financial Officer, commented that “The notes’ redemption was key to meeting one of the main drivers of our new strategic plan disclosed to the market at the end of March: delivering shareholder returns of up to €600m between 2023 and 2027. In addition, we are proud to have been able to reduce the company’s net financing cost (from 4.5% to 4%), in the context of ongoing high interest rates.” Building, Design & Construction Magazine | The Choice of Industry Professionals
The outlook for construction investment remains challenging, with little or no growth coupled with persistently high inflation creating stagflation, the Building Cost Information Service (BCIS) cautioned in its latest industry report. It found that the dramatic increases in costs of materials were stabilising, but added that products which were energy intensive were still likely to see some price volatility. BCIS warned it was likely that labour would become the main cost driver in the near term as ingrained worker shortages and high inflation push up nationally agreed wage awards to match site rates for self-employed labour. BCIS head of consultancy Dr David Crosthwaite said: “The outlook for the construction industry at present is fairly bleak and challenging over the next five years. “While the wider economy seems unlikely to fall into a deep recession, a sustained period of stagflation is the best we can hope for, which will make for a difficult environment for construction investment. “New work output is still below the pre-crisis levels recorded in 2017 and forecasts suggest new work output won’t return to pre-crisis levels until 2027, representing ten years with no real growth in the sector and a lost decade. “Output in the largest sub sector, housing, is expected to decline sharply this year, with infrastructure the only sector showing any sustained growth over the next five years, despite recent tinkering with HS2 and the Lower Thames Crossing project. “This is based on our working assumption that the infrastructure and construction pipeline isn’t drastically cut back by the Government when this is reviewed in the autumn.” BCIS said the Office for Budget Responsibility was forecasting just one year of negative growth in 2023 but Crosthwaite feels that the recession may last longer as the fundamentals don’t support this upbeat prediction. In the wider economy, prices tend be sticky and the target of halving the Consumer Prices Index by the end of the year, and returning to long term trend by 2024, looks optimistic based on the data. Crosthwaite added: “Continuing interest rate rises are a blunt instrument and have the capacity to choke the economy. “Inflation is largely being driven by too little supply and not much demand. Any impact on future demand levels with relatively high interest rates impacting the cost of borrowing, could reduce investment levels further and result in increased recessionary pressures and a stagnating economy. “So, in the wider economy we have the prospects of relatively high inflation and the cost of borrowing increasing, combined with little or no growth.” BCIS also found private commercial property had not recovered since the 2008 peak, having suffered the fallout from the financial crash and the recent changes to demand for both retail and office space, which has fundamentally changed following the pandemic. Dramatic increases in material costs are predicted to slow as product supply continues to improve, which should help to offset the worst volatility in prices, which has been at its highest since the mid-1970s. However, most products which are energy intensive are still likely to see some price volatility. The overall size of the construction workforce has shrunk by more than 150,000 since the pandemic, driven by a significant decline in the number of self-employed workers and there remains a shortfall of 46,000 workers in the construction industry. For more information about BCIS, visit the website at www.bcis.co.uk Building, Design & Construction Magazine | The Choice of Industry Professionals
