Balfour Beatty has agreed a funding deal with insurer AIG for a major build-to-rent development in Manchester, worth an estimated £65m.
Balfour Beatty Investments reached financial close with AIG Global Real Estate, AIG’s property investment arm, for The Lancastrian development in Manchester’s city centre.
The signing of the deal comes as Balfour begins construction on the scheme, which will deliver 274 flats within a short distance of Manchester’s Northern Quarter District.
Work on the development is expected to be completed in the summer of 2020.
The contractor acquired the site in January 2016 and secured full planning consent in July that year. The latest deal will see the transfer of landownership to AIG.
Balfour Beatty Investments is the company’s international infrastructure investment arm and has backed more than 70 projects over the past two decades, predominantly in the US and UK.
Current investments include the M25 where Balfour Beatty has a stake in Connect Plus – the consortium responsible for the design, build, finance and maintenance of the orbital motorway.
The Lancastrian Balfour Beatty AIG Global Real Estate Manchester Terrace 02
Other projects include the £542m Queen Elizabeth Hospital in Birmingham, which was built by Balfour and subsequently operated and maintained by Balfour Beatty Investments under a PPP deal.
As part of the deal the contractor also invested £23m of equity into the scheme.
Recent years have seen Balfour Beatty Investments move into new markets such as student accommodation and the private rented sector.