Residential Development Unlocked by £75.6m Deal

Axis RE and Marco Living have agreed a deal with Singapore-listed real estate company City Developments to fund 1NQ, a 261-apartment scheme in the Northern Quarter.

City Developments, which has paid £75.6m for NQ1, its fourth PRS project in the UK.

The first was CDL’s acquisition of the development site for a 665-unit project in Leeds called The Junction. This was followed by another two acquisitions in 2021 – one by CDL Hospitality Trusts, the group’s REIT associate, a 352-unit forward-funded project in Manchester named The Castings, and the other project by CDL called The Octagon in Birmingham, with 370 units. Sherman Kwek, CDL Group chief executive, said: “Despite an uncertain macroeconomic environment, our PRS assets have shown resilience and strong growth potential.

“We have continued to scale up our global living sector portfolio to drive growth in our recurring income. 1NQ marks CDL’s first UK PRS acquisition under a forward-funding arrangement, which enables us to secure our investment at a fixed cost, manage our cash flows over the development period and benefit from potential capital appreciation.”

Axis RE and Marco Living secured planning permission for the Manchester development in June 2023. Since then, they have appointed United Living New Homes, a subsidiary of United Living Group, as the main contractor.

Work is due to begin this month and complete in 2026.

Nick Mullins, director at Axis RE, said: “Manchester City Council’s clarity of its strategic approach and direction within this area of the City Centre will now enable us to bring 1NQ to life in what continues to be a particularly challenging economic environment.

“We are excited to be working with CDL and ULG to deliver the project and this deal is testimony to what we can achieve as a company and is another step forward in the long-term regeneration of this part of the Northern Quarter.”

Caroline Lewis, managing director of United Living New Homes, said: ‘“We are delighted to have been awarded this contract to construct 261 build-to-rent homes. United Living strives to create sustainable housing solutions with a positive impact and this  development will help address the housing shortage in Manchester.”

The consultants involved with the project include Primas, JMW, Ashurst, Leach Rhodes Walker, TPM, Fairhurst, Crookes Walker, Avison Young, Quantem, Asset Building Control & Jensen Hughes.

CBRE acted for Axis as funding agent on the deal.