European real estate investment and asset management firm Cording Real Estate Group has agreed to forward fund a build-to-rent development in the Lace Market area of Nottingham by Abode Nottingham for £17.3 mln (€20 mln).
The agreement represents Cording's third deal for its new £400 mln Cording UK Residential Investment Fund, which invests in the private rented sector (PRS) on behalf of Continental European investors.
'This is our second PRS project in Nottingham after Saffron Court in Crocus Street, which reflects our enthusiasm for the city in terms of demographics, local economics and affordability,' said Charlie Miller, director of residential acquisitions at Cording.
'Half of the population is under the age of 29 and that includes a thriving student population. Much of the housing stock in Nottingham is old and the supply of new dwellings has been very limited. We expect strong demand for the apartments.'
Located on High Pavement and Short Hill, the development will involve a mix of refurbishment of Grade II-listed buildings and new build. It will provide 117 studio, one and two-bed apartments for rent. Construction is expected to commence on site in the first quarter of this year and is expected to be completed in the first quarter of 2021.
The lettings and management services for the completed development will be provided by Cording’s in-house PRS team.
The Cording UK Residential Investment Fund was launched in August 2018 with equity commitments of more than £100 mln from German institutional investors. Cording is expecting to raise an additional £150 mln of equity commitments from Continental European institutional investors, adding leverage to create a £400 mln warchest.
The fund’s first two acquisitions were also forward fund agreements, a £50 mln deal at the Merlin Works site in Leicester and another for around £40 mln in Warrington.
Cording was advised by Osborne Clarke on the legal aspects of the Nottingham deal and EY on the tax structuring. The AIFM of the Fund in Luxembourg is Pancura SA, while Aztec Group acts as central administrator.