Clifford Chance

Clifford Chance advises Heimstaden Bostad AB on their £160 million acquisition of Soho Wharf heralding their entry into UK real estate market

International law firm Clifford Chance has advised Heimstaden Bostad, a leading residential real estate company in Europe, on their acquisition of Soho Wharf in Birmingham for £160 million from Apsley House Capital and Galliard Homes. This transaction marks Heimstaden Bostad's entry into the British real estate market.

Soho Wharf is a sizeable residential newbuild project located just outside the city centre of Birmingham and is part of a wider plan to expand Birmingham to the west, converting former industrial areas into new neighbourhoods with generous public landscaping and high-quality architecture. The project consists of 752 homes, 3 commercial units and 300 parking spaces with 64 homes being offered at discounted market rents.

Clifford Chance advised Heimstaden Bostad on the key legal aspects of the transaction including the share acquisition of Soho Loop Limited; the development funding agreement with Galliard Homes; the investigation of Soho Loop Limited's title to the site; planning including an amendment to the S.106 deed of variation to enable affordable housing for rent; the construction package; and tax in conjunction with FTI Consulting.

The transaction is structured as a turnkey forward funding project with Galliard Homes as developer and contractor. Heimstaden Bostad will fund the development based on construction milestones but does not take on direct development risk. Construction has already started on site and will be completed in the period Q1 2023-Q1 2024.

Birmingham is fast-growing and the second largest city in the UK. With six universities and more than 65,000 students, it is also the largest educational area outside London and has one of Europe’s youngest populations, 46% being under the age of 29. The area has favourable macroeconomic and demographic trends, including strong population growth and increasing average disposable income.

“An entry into the British market is in line with our strategy to expand into strong and attractive European markets. By providing high-quality yet affordable homes in an up-and-coming area, we are well-positioned to capitalise on the growing rental market in Birmingham and the United Kingdom,” said Søren Vendelbo Jacobsen, co-CIO at Heimstaden.

Patrik Hall, CEO of Heimstaden, commented, “We are excited to enter the British market and to deliver a good product that will be well received by our future tenants. With Birmingham’s population growth and positive outlook, we look forward to providing sustainable and Friendly Homes to the market."

Real Estate partner Alis Pay, who led the transaction commented, "We were delighted to advise Heimstaden Bostad on their entry into the UK real estate market having previously advised them in other jurisdictions through our European network. Given the huge demand in the UK for quality homes and the current housing shortage, this new development will deliver much needed quality housing stock and connects with the UK Government's goal to achieve 300,000 new homes per year."

The Clifford Chance team was led by Real Estate Partner Alis Pay, supported by Senior Associate Sarah Dawson, Associates Emily Mattley and Zain Farook. Construction Partner Ed Bretherton and Associate Emma Clarke advised on the construction aspects, Head of Environment & Planning Nigel Howorth and Senior Associate Elizabeth Hardacre advised on planning. Head of UK Real Estate Tax David Saleh, Director VAT Simon Corzberg and Senior Associate Edward Page worked alongside FTI Consulting to advise on tax.