The acquisition brings Legal and General’s development pipeline in Manchester to over 750 units, which it said is underpinned by a significant demand for rental accommodation.
The acquisition has been made through LGIM Real Assets’ open-ended build to rent fund.
The West Tower will be the tallest BTR scheme in the UK.
Slate Yard development in Salford
Deansgate Square is Legal and General’s second BTR scheme in Greater Manchester and follows its Slate Yard development in Salford, which was 50% let before first occupation.
The third and final phase of The Slate Yard is due to start construction shortly.
Both developments will create a community for residents who will benefit from free WIFI, a residents lounge and gym. Deansgate also offers access to other premier facilities such as a tennis court and swimming pool.
Housing needs remain under-served
Whilst Manchester has seen increased investment over recent years, the city’s housing needs remain under-served, LGIM said.
According to Experian, the population of Greater Manchester is expected to grow by 14% over the next 20 years with 3,465 rental households forming every year.
Despite an estimated 12,000 new homes required each year to meet demand, annual delivery since 2010 has averaged just 650 homes.
Dan Batterton, BTR fund manager at LGIM Real Assets, said: “As demand for rental accommodation continues to outweigh supply, Legal & General is increasing the scale of its Build to Rent portfolio, UK wide.
“The acquisition of Deansgate and our award-winning Slate Yard development are excellent examples of Legal and General investing in long term sustainable schemes. We are supporting wider urban regeneration through utilising existing local infrastructure and maximising land density in areas where there is a housing shortage.
“Manchester is the second most populated area in the UK with a particularly diverse economy. The apartment sizes, amenities, specification and affordability across our multiple schemes will allow us to cater for a wide demographic across this varied community.”
Richard Leese, leader of Manchester City Council, said: “By providing hundreds of homes for market rental this development will make a significant contribution to the council’s residential growth strategy for homes across a range of types and tenures to meet demand in our vibrant and fast-growing city. Legal and General are already a significant player in Manchester and we welcome their investment in Deansgate Square.”