Essential Living has made its fourth acquisition, purchasing a site in Bethnal Green as part of its plan to design, build and manage 5,000 private rented homes across London and the South East.
The deal will transform two warehouses into one of the capital’s first purpose-designed rental developments – providing vital housing in one of the capital’s most trendy yet over-crowded boroughs.
The site was purchased unconditionally for £14m this week from Albany Homes and is situated on the corner of Cambridge Heath Road and Three Colts Lane, seconds away from train and Tube links.
Planning consent is in place for 149 units at the inner London site.
Bethnal Green has undergone significant regeneration over the past decade, with a burgeoning arts scene overflowing from nearby Shoreditch, and significant Olympics-fuelled public investment.
As a popular enclave for twenty-something hipsters, Bethnal Green has sprouted a host of new apartment blocks, alongside boutique cafes and organic eateries that pepper the streets alongside traditional East End pubs.
But Its proximity to Brick Lane, Spitalfields Market, Stratford Westfield and the City open up a far wider net of potential demand.
Phenomenal sales successes across London’s housing market have kept house prices rising – with Jones Lang LaSalle predicting price rises of 2% in 2013 accelerating towards 8% pa by 2016, making properties even more unaffordable for London workers.
London-based Essential Living, which has $200m in equity funding from M3 Capital Partners, is the UK’s first institutionally-backed platform specifically created to design, build and manage rented homes.
The deal joins a growing portfolio which includes Berkshire House in Maidenhead, 100 Avenue Road in Swiss Cottage and Trafalgar Way, next to Poplar Dock where two linked residential towers are planned.
Jones Lang LaSalle acted on behalf of the sellers, Albany Homes, who had secured a planning permission for the demolition of the existing warehouse units and the construction of a scheme comprising of 149 apartments above 13,000 sq ft of commercial space.
Darryl Flay, chief executive of Essential Living, said: “Bethnal Green is a historic part of London and we are confident that it’s prime location and diverse array of amenities will ensure strong and growing demand for rented homes over the coming years.
“Inner London is severely lacking in quality housing that is affordable to working professionals who fall between social housing and ownership and we are delighted that the Mayor of London recognises the importance of expanding a more professionalised private rented sector.
“But through delivering a true rental brand, we want to make renting a lifestyle choice – not simply a stop gap. We look forward to working with Tower Hamlets Council and developing our long term interest in the community.”
Adam Challis, head of residential research at Jones Lang LaSalle said: “Essential Living is leading the way on build to let and we are excited by the opportunity that Three Colts Lane presents to deliver the first genuine property in this emerging sector.
“Build to let has been a part of the lexicon of the UK housing market since 2008, but we are finally at a stage where the theory is becoming reality. Renters in London can look forward to improvements in the quality of properties available for rent, with professional management to match.”
Tim Wright, director at Jones Lang LaSalle, said: “Growing interest across City fringe locations such as Shoreditch, Old Street and Aldgate is causing a ripple effect further east. But with sales prices predicted to carrying on rising – having a good supply of professionally managed rental property will be vital to the London housing market.
“This site boasts excellent transport links and good local amenities – but the real value of Essential Living’s proposition comes from seeking to create a lifestyle product as much as a property asset.
“The number of London households in the private rented sector has grown by nearly a third since 2007. Build to let will make a big contribution towards meeting the dire need for new housing supply in capital.”
