Sweden’s Heimstaden Bostad has paid SEK 1.9 billion (£160 million/€190 million) for a 752-units residential development project in UK city Birmingham.
The project, Soho Wharf, has been acquired in a forward funding deal with Apsley House Capital and Galliard Homes. Galliard is the project developer.
The scheme is located just outside the city centre and is part of a wider plan to expand Birmingham to the west, converting former industrial areas into new neighbourhoods with plentiful public landscaping and high-quality architecture.
The project consists of 752 homes of which 64 will be offered at discounted market rents. There will also be three commercial units and 300 parking spaces. The scheme has a total lettable area of 48,710 sq m and the estimated gross rental income will be £9.4 million per year.
“An entry into the British market is in line with our strategy to expand into strong and attractive European markets. By providing high-quality yet affordable homes in an up-and-coming area, we are well-positioned to capitalise on the growing rental market in Birmingham and the United Kingdom,” said Søren Vendelbo Jacobsen, Heimstaden’s co-chief investment officer.
Heimstaden Bostad will fund the development based on construction milestones but but will not assume direct development risk. Construction has started on site and will be completed between Q1 2023 and Q1 2024.
Birmingham is fast-growing and the second largest city in the UK. With six universities and more than 65,000 students, it is also the largest educational area outside London and has one of Europe’s youngest populations, 46% being under the age of 29. The area has favourable macroeconomic and demographic trends, including strong population growth and increasing average disposable income.
Malmö-based Heimstaden owns about 114,000 homes valued at SEK 179 billion.