M&G Real Estate has pumped £200m into a 420,000 sq ft Birmingham office scheme developed by Ballymore.
M&G invests £200m in Birmingham office job
The investor will fund the construction of Ballymore’s Three Snowhill project, said to be the largest ever city centre office development outside of London.
Bam Construct was named preferred bidder on the scheme last June. The development is expected to be completed in 2018 and forms part of Birmingham’s ‘Snowhill 2030’ masterplan.
M&G Real Estate also acquired Ballymore’s Two Snowhill development in 2014.
Chancellor George Osborne said the Snowhill scheme “will play an important part” in the growth of what has been dubbed the ‘Midlands Engine’.
Mr Osborne added: “Not only will this project initially create hundreds of important construction jobs in Birmingham, the resulting space will play home to businesses with thousands of valuable jobs right in the heart of the Midlands – a vital step in us rebalancing the economy in Britain.”
M&G Real Estate chief executive Alex Jeffrey said the development would help meet growing demand for office space for businesses, which is set to rise as construction work kicks off on HS2 next year.
“While occupier demand continues to outstrip supply and push prime rents upwards, Three Snowhill will benefit from low vacancy rates and support our strategy to provide our investors with long-term income-driven growth,” he added.
Ballymore chief executive Sean Mulryan said: “Working with the City, our funding partner M&G Real Estate and our main contractor Bam, we will deliver a landmark building and the final element of what is one of the largest and most prestigious commercial developments in central Birmingham.
“Ballymore committed to Birmingham and the Snowhill scheme over 10 years ago. That long-term commitment has resulted in the successful transformation of Snowhill into a new and thriving business district.”
Earlier this month, Construction News revealed that M&G had begun talks with potential construction partners to help it expand further into the private rented sector.
The investor set up its UK residential property fund in 2013 and it now has £300m of assets either under construction or with committed investments.