City Developments buys UK freehold site for $27.5m

It plans to develop a 664-unit build-to-rent residential project at the 193,752 sqft site.

City Developments (CDL) has expanded into the UK private rented sector (PRS) with the acquisition of a freehold site from Alpha Real Trust for approximately $27.5m (£15.4m), an announcement revealed.

The price translates to an approximate $142 (£80) psf for the 193,752 sqft site, the firm said. A full planning permission was reportedly obtained for the site which has a residential and commercial net lettable area of around 386,000 sqft and 16,000 sqft, respectively.

Also read: CDL's profits edged up 6.7% to $557.33m in 2018

“CDL plans to develop a 664-unit build-to-rent residential project with retail space located within the site’s heritage arches beneath a viaduct,” the firm revealed. “The project is expected to be completed in 2023 at an estimated total development cost of approximately $250m (£140m). Net yield is expected to be 5% annually.”

Meanwhile, CDL also acquired two prime Grade A London commercial properties in 2018 for approximately $1.02b (£568m), the firm added. The two freehold buildings, 125 Old Broad Street (the former Stock Exchange Tower) and Aldgate House, are poised to benefit from the tightening of London’s existing office stock and limited new supply which will drive rental growth, the firm noted.

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