Court Collaboration is set on making a mark on Birmingham’s residential development, with plans to invest up to £250m across new projects.
The company already boasts a 1,000-home portfolio. But it has achieved planning consent for a further 4,500 homes across build-to-rent, build-to-sell and student accommodation schemes, of which 1,250 are in construction. Chief executive Alex Neale told EG that the company will continue its working relationship with Birmingham City Council as it builds these projects out.
The pipeline includes the PGIM-backed Edition Birmingham, Court Collaboration’s first for-sale residential scheme comprising 581-homes on a Brindley Place car-park site that was the company’s fourth plot acquired from the council. And as Birmingham looks to sell assets to recover from bankruptcy, Neal said “there are a lot more sites to go”.
“In terms of our relationship as a business with the council, it has really gotten stronger,” he added. “It’s when the chips are down that relationships really matter. Not that we are getting special treatment – we play by the rules. But it is because we know those rules, and we know the people involved making decisions.
“We got a planning consent for Edition within nine months, so from a funding point of view, for a global powerhouse like PGIM, that gives them complete confidence to invest. We are de-risking the riskiest part, and that is our USP.”
Viable mixed-use market
Mixed-use will be another part of Court Collaboration’s expansion in the city. Neale said he has seen the Birmingham’s office market “grow exponentially”. The 200,000 sq ft Paradise development “needs to be replicated three or four times over the next 15 years” to keep pace with demand, he said.
“Mixed use is going to come back into the fray,” Neale added. “The office market has taken something of a hammering post-Covid. But there are sites now that are pushing £50 per sq ft, so that makes it viable. And if you couple that with residential values in the regions pushing over £600 per sq ft, you look at some of the BTR deals that have been starting to happen here, and yields start to come in.
“We are in the right economic climate now for Birmingham to really push on as a city, and it feels like we are getting the right economic and political environment to do some really exciting stuff.”
No crystal ball
Edition Birmingham will deliver 23,000 sq ft of wellness-inspired amenity, including a pool, rooftop spa and a state-of-the-art skyline gym, featuring yoga and spin studios and outdoor terrace.
Neale wants such for-sale projects to grow at the same pace the city’s BTR market has. At a launch event for the scheme, Neale said: “My biggest frustration with Birmingham for the last five years has been we all jumped on the BTR bandwagon. Every developer did. And I said, ‘Guys, look at Manchester, look at what they are doing. We have to look at the for-sale market.’
“If we can push a high-spec scheme, and partner with best-in-class agents like Select Property, with common values, then it will work.”
Court Collaboration considered a BTR development for the site, but Neale said viability of that market has been “obliterated” during years of political and economic instability.
He said: “Over the last few years, you can count on one hand the number of BTR deals that have happened and that’s a big deal.”
Court Collaboration’s 667-home BTR scheme at One Eastside was forward funded by the Pension Insurance Corporation for £200m in November 2022.
“We were very lucky to get that, it was six weeks after Truss economics,” Neale said, referring to then-prime minister Liz Truss’s controversial September 2022 mini-budget. “Taking all that into consideration and then construction price inflation having gone through the roof, no one has a crystal ball on yield in terms of BTR.
“For an investor to take a risk on a huge 46-storey tower, 581 homes and hoping and praying that yields come in – our personal view is that they will because of the supply and demand imbalance. However, a for-sale product made sense for this site.”
Where Manchester leads
Neale said that Edition’s £600 per sq ft sale price has made Birmingham viable again.
“As with One Eastside, we were told that no one would do 50-storey towers in Birmingham, and we did it,” he said. “We took the first step, and now everyone wants to. And with Edition we are pushing over the £600 per sq ft sale price, and we have been the first ones in Birmingham to do it, the same as Manchester did it.
“We are just a little bit behind Manchester in terms of our growth curve, but we can point to Manchester and the enormous success that they have had as a city and say, ‘Why can’t Birmingham replicate that’.
“The opportunity in this city is incredible.”
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