CDL buys private rented sector project in Manchester for GBP75.6 mil

CDL’s investment in 1NQ reinforces its strategy of investing in prime major cities with mature rental markets. “We believe Manchester is one such city, given its well-established labour market, resilient economic fundamentals, and low vacancy rate in its PRS market,” Kwek adds.

CDL’s investment in 1NQ reinforces its strategy of investing in prime major cities with mature rental markets. City Developments Ltd (CDL) announced on Nov 14 the acquisition of 1NQ, a 261-unit freehold private rented sector (PRS) project in Manchester for GBP75.6 million (approximately $125.7 million). Located near Piccadilly Station within the Piccadilly Basin neighbourhood, 1NQ will be developed into two apartment blocks spanning 10 and 12 storeys respectively.

Sherman Kwek, Group CEO for CDL, commented on the acquisition: “This year, our group’s global PRS portfolio has grown by almost 70% to 4,489 operational and pipeline units in the UK, Japan, Australia and the US, up from 2,640 units last year.”

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CDL forward-funded the project, which will commence construction this month and will comprise a mix of one-, two- and three-bedroom apartments and two commercial units on the ground floor. The development is expected to be completed in 2026.

Kwek elaborated on the significance of this arrangement: “This will allow CDL to secure its investment at a fixed cost, manage cash flows over the development period and benefit from potential capital appreciation.”

Manchester is an attractive city to develop a PRS project, due to its “well-established labour market, resilient economic fundamentals, and low vacancy rate in its PRS market,” according to Kwek.

This marks the fourth PRS project in the UK for CDL since 2019. It is also the first UK PRS acquisition under a forward-funding arrangement.

This investment is a continuation of CDL’s strategy of investing in prime major cities with mature rental markets. 1NQ is a testament to this strategy, as the project is set to be a lucrative venture in the long run.