- OakNorth has completed an £8.6m loan to the 50:50 joint venture between Galliard Homes and Apsley House Capital;
- The developers hope to use the finance to convert a vacant 254,400 sq.ft. site into a major new mixed-use development;
- Birmingham needs to develop over 4,000 new homes a year to keep up with demand, but is only expected to do 2,777 this year, so will unfortunately fall well short of its target;
- In terms of commercial, the third quarter of 2018 saw another steady performance in Birmingham’s office market, with a take-up of 158,935 sq. ft. over 28 transactions.
OakNorth – the bank for entrepreneurs, by entrepreneurs – has completed an £8.6m deal with Galliard Homes, one of the UK’s largest privately owned residential property developers, and Apsley House Capital, which has worked with Galliard on several large-scale residential projects in the past. The loan will be used to acquire a 254,400 sq.ft. vacant site in Birmingham which formerly housed Joseph Chamberlain Sixth Form College and convert it into a mixed-use scheme.
Commenting on the deal, Jonathan Morgan, Galliard Director, said: “By 2039, Birmingham’s population is expected to increase to 1.3m meaning that the city is in desperate need of new homes and more office space. Unfortunately, it’s currently falling well below the revised 4,000 new residential units needed per annum target to keep up with demand, with the total for 2018 expected to be around 2,777. In terms of commercial, the 2019/2020 will see a spike in the volume of lettings as occupiers which took five-year leases in 2014 look to relocate.
“That’s why we hope to secure the planning permission needed to deliver this mixed-use scheme in an area that has been identified as a priority for regeneration by the City Council, as per the Balsall Heath Neighbourhood Development Plan. To ensure we were able to apply for planning permission within our desired time frame, we needed to work with a lender who could move as quickly as we could. This meant that OakNorth was the obvious choice – we have done several transactions with them now, so they know our business extremely well, and have time and again proven their ability to deliver results quickly.”
Damien Hughes, Senior Property Finance Director at OakNorth, commented: “Both Galliard and Apsley House Capital share Birmingham City Council’s vision of it being a great place in which to live and work. Over the last five years, they have assembled a residential portfolio in the city with a potential GDV in excess of £500 million, including the 750-unit Soho Loop site and the 500-unit in Birmingham’s Jewellery Quarter – both of which we provided the funding for. We’re delighted to be working with them both again and wish them the best of luck in their application for planning permission.”