Bahrain-based Ibdar Bank said it has made a £8 million ($11.4 million) investment in a prime new residential project, Angel Gardens, to be developed in Manchester’s city centre, UK.

Angel Gardens, consisting of residential 458-apartments and a total development value of £124 million ($177 million), forms part of the wider Noma re-development project aimed at transforming Manchester city centre.

At a cost of £800 million ($1.14 billion) , the Noma project aims to renovate and re-introduce more than 400,000 sq m of new office, retail and leisure in addition to 4 acres of outdoor spaces.  

Angel Gardens, located in close proximity to the city’s main transport interchange, central shopping district and financial centres, has been designed to be a leading purpose built Private Rented Sector “PRS” development – a market segment with significant demand and high rates of growth.

The number of households in the private rented sector in the UK has more than doubled since 2001, rising from 2.3m to 5.4m by 2014 accounting for around 20% of the total number of households.
PwC and others project that this trend will continue with an additional 1.8m households becoming private renters by 2025 supporting the development and success of schemes such as Angel Gardens, which has been designed to provide an unrivalled offer as one of the most desirable residential addresses in Manchester.

The development is being funded through a combination of equity invested by Ibdar and other co-investors and senior debt to be obtained from one of the Banks.

Forecasts indicate an expected income return through operations starting at 9.1 per cent on stabilized income, rising to 10.8 per cent every year after three years of stabilised operations and a targeted IRR of over 15 per cent over a five year investment period.

On the deal, Ahmed Al Rayes, the acting CEO said: "In line with our strategy, we continue to identify and invest in prime global real estate with the UK market constituting an area of strong and ongoing interest for Ibdar Bank."

"We are especially pleased to announce this latest transaction in Manchester, which is not only the UK’s second largest city and commercial centre, but also the fastest growing regional centre in the country today.”  

Al Rayes said with this investment, the bank was able to leverage and build on the positive dynamics of the private rented sector in the UK and, in particular, strong residential rental growth trends and demand in key regional cities.

"In Manchester, which is home to over 2.5 million people and more than 7.5 million people living within less than one hour’s commute, we see strong and rising residential demand combined with a gap that exists for high quality, new build residential accommodation," he stated.

"Given these factors, we are confident that this is a compelling investment for the bank and our GCC investors looking for further portfolio diversification, steady income generation and potential for upside value appreciation," he added.-TradeArabia News Service