HGP provides c. £7.6 million equity commitment for Wales’ first co-living scheme

Housing Growth Partnership (“HGP”), the Lloyds-backed equity investor in the UK Living sector, has committed c. £7.6 million of equity which will support Urban Centric’s acquisition of a former L&G office building in Cardiff, Wales, which it intends to transform into what will be Wales’ first institutional grade co-living scheme.

It represents HGP’s first investment in the co-living sector, as it continues to broaden its exposure across the high-growth UK Living sector in response to existing and prospective partner demand.

Occupying a prime city centre location in close proximity to the central retailing area and Queen Street Rail Station, the EPC-A rated scheme will see the building’s existing core retained, minimising the embodied carbon. The development will comprise 203 studio apartments, designed to appeal to the next generation of residents looking for high quality but affordable rent in the undersupplied city centre.

Initial site work is expected to commence in Q2 once formal planning has been secured, with practical completion expected by Q4 2025.

It represents the first transaction between HGP and Urban Centric, a highly regarded real estate developer with over twenty years’ experience developing mixed use regeneration residential projects across major UK cities.

Reflecting the increasingly important role that UK equity funding can play in bringing forward new schemes and the regeneration of communities, HGP has invested £400 million of equity since 2016, across 156 residential projects with a total GDV of £3.3bn.

Mike Murphy, Investment Director at HGP, commented: “This first investment alongside Urban Centric highlights the ever-growing significance of equity funding in creating, regenerating and delivering vibrant communities and homes that meet an unmet demand for housing in key regional UK cities.

“It also underscores our team’s capability in executing complex equity transactions across the UK Living sector. Co-living in particular is a nascent but fast growing product, as people prioritise city centre living and the infrastructure and social advantages it brings.”

Tom Larkin, Acquisitions Director at Urban Centric, added: “We are very excited to join forces with HGP and deliver Wales’ first institutional grade co-living scheme. Cardiff has all the right credentials to underpin a thriving community aimed at a wide spectrum of occupiers, from mature students and young professionals through to contract workers staying for long periods of time. It’s highly likely that this use class will continue to grow in Cardiff and we are in a fortunate position to set the tone for a best-in-class product that will stand the test of time, while meeting the needs of an evolving population.”