Carlyle in £115m loan for Manchester build-to-rent

Global investment firm Carlyle has provided real estate developer Round Hill Capital with a £115 million development loan to fund the construction of Fairfax, a 488-unit luxury build-to-rent (BTR) scheme in Manchester.

The loan by Carlyle’s Global Credit platform represents the first transaction between the two parties.

The Fairfax development, which was acquired via a forward funding agreement by Round Hill Capital in August 2022, comprises two towers totaling 488 one-bed and two-bed high quality apartments.

“Serving as the gateway to the Portugal Street East masterplan regeneration area, the scheme is ideally located within a five minutes’ walk from Manchester Piccadilly station with Manchester city centre less than a kilometer away,” said Round Hill.

“Specialist BTR developer Olympian Homes is the development manager on the scheme, with RG Group serving as the main contractor. Ground works have been completed, with the concrete cores well progressed.

“Manchester has experienced significant demographic growth, with the city’s population growing by 10% and employment by 28% over the past decade.

“With new housing supply struggling to keep up with demand, rents increased by 13% year-over-year as of June 2023, which was the highest of the UK’s Big Six regional cities.

“A recent CBRE report ranked Manchester as the UK’s top growth city for BTR, reflecting demographic shifts and affordability challenges in the for-sale market.”

Taj Sidhu, Head of Carlyle European and Asian Private Credit, said: “This is a unique opportunity to fund a large scale and landmark residential development alongside a highly established living sector investment manager, in what is a prime area of Manchester.

“Leveraging the resources and experience of Carlyle’s Global Credit team, the development will deliver the very best of city centre living, with luxury amenities and contemporary design throughout the apartments and communal spaces.”

Tom France, Head of UK Round Hill Capital, added: “Fairfax is our flagship UK Build to Rent scheme, in what is one of our high conviction sectors where we have ambitions to continue scaling our exposure.

“Carlyle is a blue-chip lender and their support is a strong endorsement of our vision for the scheme.

“Manchester is one the UK’s most vibrant and dynamic cities which is now firmly established as the UK’s dominant alternative to London.

“This has underpinned a growing influx of young professionals and students for whom thoughtfully designed rental properties in central locations are highly sought after.

“With a limited development pipeline, we anticipate strong demand for what will be one of the city’s premier BTR schemes.”

Carlyle Global Credit manages $150 billion in assets as of September 30, 2023.