Middle Eastern investor Apache Capital Partners has formed a £1bn joint venture with Moda Living to establish the UK’s first regional private rented sector (PRS) platform.
In a huge fillip for regional PRS investment, Apache and Moda have joined forces to create a partnership that will initially develop five schemes totalling 5,000 units, with further sites to be rolled out in the future.
To kick off the joint venture, Bahrain-based Apache has struck a deal with Moda to fund its first scheme in Manchester for £130m. The deal for the 458-unit Angel Gardens development has been agreed at a yield of 5%.
The joint venture, which is in the process of going through legal teams and is expected to be signed off in the coming weeks, will also develop further schemes in Birmingham, Liverpool and the South East.
Moda, a joint venture between Caddick Developments and Generate Land, will retain an equity stake in the partnership that will be built up as it takes profits from the schemes and translates them into investment.
Two further Moda PRS schemes, both in Leeds and totalling 1,900 units, could be rolled into the platform as and when planning permission is achieved.
Apache, which is backed by high-net-worth sovereign wealth money from the Middle East, will work with Moda to plan, develop and operate the schemes in the platform.
The partnership will largely focus on the regions but London and South East sites are also under review. An exit is expected at some point in the form of a real estate investment trust or an IPO.
The Angel Gardens deal would be one of the most significant in the fledgling Manchester PRS scene, where several other schemes are also attracting the interests of investors.
Moda first sought a buyer for the scheme – which has planning in place for a 36-storey tower – in March and attracted interest from a long list of investors.
Moda’s PRS model targets higher-end renters and its schemes include facilities such as sports courts, barbecues, meeting rooms, communal gardens, coffee lounges, gyms and cinema rooms.
A one-bed apartment at Angel Gardens is set to attract rents of £1,000 a month, while a two-bed will hit £1,400.
Included in the Apache-Moda joint venture is the 40-storey PRS tower at Peel Group’s Liverpool Waters, which is under development and will total 325 units.
Moda is also under offer on a site in Birmingham, which will fall into the joint venture, as well as one in the South East and a further site in another region.
Moda’s two sites in Leeds – City One and Quarry Hill – are in the planning process for 1,200 units and 700 units respectively and may be rolled into the partnership at a later date.
CBRE advised Moda Living. All parties declined to comment.