Precede Capital and Nomura announce £227m whole loan financing of Downing Living’s multifamily development in Manchester
Precede Capital Partners (“Precede Capital”), the real estate development lending platform, in partnership with global financial services group Nomura, today announces that it has provided a £227 million four-year whole-loan facility to Downing Living, the residential-focused division of leading property developer and operator Downing. The facility will be used to finance the construction of First Street, a multifamily development in Central Manchester.
This deal is the first originated and arranged by Precede Capital since it announced its partnership with QuadReal Property Group (“QuadReal”) and concurrent rebrand from Précis Capital Partners in January 2023. The partnership saw QuadReal acquire a shareholding in the firm and commit up to £1bn to deploy into its development loans.
Consisting of 1,790 units across three buildings, the First Street development will be targeted at new graduates and young professionals, with units ranging from studio apartments to five-bedroom shared accommodation. Downing, a vertically integrated real estate developer and manager with a 30-year track record and over £2bn of real estate developments delivered across the UK, will construct and manage the property. Completion of phase one is scheduled for August 2024, with phase two scheduled for delivery in March 2025.
The development, which is situated in the heart of Manchester city centre’s thriving First Street regeneration area, represents an ideal commuting location and is within walking distance of Deansgate, Oxford Road and Manchester Metropolitan stations.
The lenders’ ESG due diligence rated the project highly due to Downing Living’s leading sustainability ambitions. The development will have heating provided by air source heat pumps, EV charging points and rooftop solar PV provision. Downing Living is implementing a strategy for the asset to be net zero by 2038 depending on the extent of grid decarbonisation and connection to the Civic Quarter Heat Network, meaning it will be compliant with ‘net-zero ready’ requirement as contained in the Future Homes Standard.
The facility, which is Precede Capital and QuadReal’s inaugural transaction, as well as Precede’s first development loan in the north of England and second jointly provided with Nomura, brings the total value of residential development loans completed by the firm to over £1.5bn.
George Downing, founder of the Downing group of companies, which owns Downing Living, said: “We are delighted to be working with Precede Capital and progressing another landmark scheme for the city of Manchester. Our First Street development will complete the long-awaited transformation of a key site at the southern gateway to what is one of Europe’s most exciting and progressive cities.
“First Street itself is part of a wider story of investment and confidence in Manchester, a future-proofed ‘15 Minute City’ where we will offer brilliant options to live, work and play on your doorstep.
“We have an excellent track record, working closely with the council, to deliver transformational city-centre regeneration schemes.”
David Jerrard, Chief Credit Officer at Precede Capital, said: “We are delighted to have closed this financing for a high-quality asset and to have provided the Downing Living team with the certainty and backing required to deliver an important project that will help meet the sustained demand for co-living schemes in this market. We are also particularly pleased to have closed our inaugural deal in the north of England, an important milestone which is testament to our team’s extensive industry relationships and our ability to identify and transact on high-calibre opportunities across the UK.”
Zhuu Ming Ang, Co-Head of EMEA Real Estate Financing at Nomura, said: “We are pleased to partner with Precede Capital and QuadReal Property Group to finance the Downing Living development. This will help address the significant undersupply of residential units in the city of Manchester especially for underserved single households.”
Precede Capital was advised by Taylor Wessing and Eversheds. Arcadis provided construction due diligence for the lenders, CBRE acted on the Valuation and Longevity Partners on ESG due diligence. Downing Living was advised by Hill Dickinson (banking legal), DLA (property legal) and Brabners (construction legal). Nomura was advised by Linklaters.
Downing is a vertically integrated real estate developer and manager with a 30-year track record and over £2bn of real estate developments delivered across the UK. Other companies across the business include Downing Living (residential division), Downing Students and Downing Construction. It’s in-house development and management expertise allows it to deliver exceptional results across a portfolio spanning student accommodation, residential, office and retail.
About Precede Capital Partners
Precede Capital Partners (formerly Précis Capital Partners) is a UK-based lending platform that partners with best-in-class developers, real estate sponsors, banks and institutional investors to provide bespoke debt financing solutions for large-scale real estate projects. Established in 2021, Precede Capital is backed by TowerBrook Capital Partners and QuadReal Property Group. Precede Capital provides finance for large-scale real estate projects across the UK. Funding a range of living assets, from residential for sale or rent, to student accommodation and later living. Precede Capital provide whole loans and whole Green Loans competitively priced, with flexible structuring and leverage.
Nomura is a global financial services group with an integrated network spanning over 30 countries and regions. By connecting markets East & West, Nomura services the needs of individuals, institutions, corporates and governments through its three business divisions: Retail, Investment Management, and Wholesale (Global Markets and Investment Banking). Founded in 1925, the firm is built on a tradition of disciplined entrepreneurship, serving clients with creative solutions and considered thought leadership. For further information about Nomura, visit www.nomura.com.
About QuadReal Property Group
QuadReal is a global real estate investment, operating and development company headquartered in Vancouver, British Columbia. Its assets under management total CAN$67.1 billion. From its foundation in Canada as a full-service real estate operating company, QuadReal has expanded its capabilities to invest in equity and debt in both the public and private markets. QuadReal invests directly, via programmatic partnerships and through operating companies in which it holds an ownership interest.
QuadReal seeks to deliver strong investment returns while creating sustainable environments that bring value to the people and communities it serves. Now and for generations to come.
QuadReal: Excellence lives here.
For Precede Capital Partners:
James Davey / Dan Thomas
+44 (0)7872 003 601
+44 (0) 2071 021 377