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Legal & General is set to bring build to rent offer to Birmingham

Newhall Square
Legal & General has agreed the funding of a prime Birmingham Build To Rent (BTR) development site known as Newhall Square for a total sum of £53m (c.€59m). Representing the sixth UK city to which it will bring its new rental offer, this latest investment brings its total pipeline of BTR units to over 1,700. A forward funding deal has been agreed with award-winning residential developer Spitfire Bespoke Homes. The development has planning for 220 residential units and 7,500 sq ft of ground floor commercial space, together with a public square and 61 car parking spaces.


Located centrally between the established Central Business District and the retail/leisure hub of the Jewellery Quarter, the site offers a strong micro location for BTR accommodation within Birmingham’s city centre and benefits from canal fronting apartments. There is currently more capital committed to infrastructure projects in Birmingham than any other European city and the site sits within five minutes’ walk of the new Paradise development, a mixed-use development that will deliver 1.8m sq ft of new office, retail and leisure space, generating 12,000 new jobs.

„As a specialist developer with a reputation for creating unique homes featuring great design and unrivalled attention to detail, we are excited to be working with L&G to bring our expertise and high standards to the BTR sector. We understand that renting is a now a tenure of choice for many urban dwellers, and recognise that they have high expectations. The traditional buy-to-let market is being overshadowed by the purpose-built rental sector, which is refreshingly focussed on service, high quality accommodation and resident amenities. Drawing strength from our parent company, IM properties, a widely respected developer of commercial and industrial properties, this is a prime opportunity for Spitfire Bespoke Homes to make its mark on the BTR market and extend our offering to a section of the market which is befitting of our own approach to quality homes in great locations“, commented David Jervis, Managing Director of Spitfire Bespoke Homes.

With a current population of 1.1m, an increase of 100,000 people since 2004, the population growth of Birmingham is the third fastest in the UK, behind London and Bristol. It also has one of the youngest populations in Europe, with under 30’s representing around 40%. However, available housing stock is at a record low and is exacerbated by weak levels of new house building in recent years.

“This development, in a highly sort after area of Birmingham, links the industrial heritage of the Jewellery Quarter with the modern business district. The location is ideally suited to high-quality, affordable and professionally-managed rental accommodation that can help to address the supply demand imbalance in the city. Spitfire was the natural partner to deliver this project as they are known for their design-led approach and have a track record of delivering outstanding quality homes across the UK. Given the huge infrastructure investment in Birmingham, it has been a target location for us in building a high-quality and well diversified portfolio of BTR schemes. We expect to continue adding schemes and new locations over the coming months”, said Dan Batterton, BTR Fund Manager at LGIM Real Assets.

L&G is investing around £1bn (c.€1.1bn) into the BTR sector, having raised pension fund capital for an open-ended BTR fund as well as a £600m (c.€669m) joint venture between Legal & General Capital and PGGM. Through the creation of a BTR asset class, it is looking to use its sources of long term capital to help address the chronic long term lack of housing supply and meet the increasing demand for affordable, quality rental accommodation. Its existing sites in Leeds, Bristol, Bath and Walthamstow are progressing well and its scheme in Salford has been home to residents since June. L&G is involved in housing creation across the spectrum, backing a fast growing pipeline of over 70,000 new homes over the next five to ten years and looking to help provide the UK’s population with high quality, affordable living at all stages in their life cycle.

“Our successful venture with L&G is materialising through a range of BTR-development programmes across the UK. This follows PGGM Private Real Estate’s ambition to build long-term partnerships with prominent local real estate players. In these partnerships we focus on large hubs with long-term economic potential like Birmingham. Our investment addresses the UK’s housing shortage and will further add quality stock to Birmingham with a high degree of sustainability”, commented Mathieu Elshout, Senior Director Private Real Estate at PGGM.