The Homes and Communities Agency is to provide £45m from its Home Building Fund to back the construction of 2,000 rental homes in Manchester, Leeds and Birmingham.
Dandara Group also secured funding from HSBC for its three projects, which it estimates will have an end value of £400m.
Housing minister Gavin Barwell announced the funding.
Dandara has offered up sites for regional PRS development before. In 2014, it was looking for a partner to bring forward five sites with a reported end value of £400m in Leeds, Manchester, Birmingham and Glasgow, with the potential for 3,000 units. At the time, the sites had not received planning permission.
Sir Edward Lister, HCA chairman, said: “This massive investment, one of the largest private rented deals this year, shows our determination to get builders building and substantially grow the market in this country.
“We’re working on a number of other deals, with builders of all sizes, and we’re also using our investment and land to attract new entrants to the industry.”
In 2015, Dandara agreed a forward-funding deal with LaSalle Investment Management for 292 flats in Aberdeen.
All sites in the current portfolio have planning, with construction to start in January. Contracts are already in place, with Galliford Try, Interserve and Sir Robert McAlpine all involved.
Following completion, Dandara Living will manage the letting and ongoing management.
Dan Tynan, founder and chairman of the Dandara Group, said: “We are now in a position to actively work with institutions, and independently, to make a sizeable contribution to this market.
“PRS is already providing accommodation for a new generation of workers in London, and with these new developments we will deliver much needed purpose-built and professionally managed build-to-rent property in the regions.”
The government’s £3bn Home Building Fund is intended to help build more than 25,000 new homes this parliament and up to 200,000 in the longer term.
Knight Frank advised on the property aspects, while Addleshaw Goddard provided legal advice.
See also:
November 2016: HCA to drop social housing regulation
October 2016: Chancellor plans £3bn home building fund
July 2015: LaSalle makes PRS debut
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