Nightingale Quarter, Derby – Q2 2021 Update

Adam Buchler is Managing Director at BBS Capital. In this article, he updates us on the Nightingale Quarter, which was previously talked about in an article published in March 2020 on Qandor Property Magazine.

At the beginning of March 2020, we were delighted to share our progress report on this prime city centre regeneration with Qandor. We had successfully launched our Phase 1 sales at the end of February, taking reservations beyond our original targets, and construction was well under way. Little did we know that just a couple of weeks later we would all be in the grip of COVID-19 going into our first national lockdown!

Given the wider backdrop of the past 12-months, I’m delighted to report that the project and our team have weathered the storm well and the development remains firmly on-track: on time and on budget.

Background:

By way of reminder, the development is a joint venture between Wavensmere Homes, BBS Capital and Cedar Invest, regenerating an 18-acre site which was once home to the Derby Royal Infirmary. Adjacent to Derby’s main shopping centre and a five-minute walk from both the station and the city’s CBD, it will ultimately deliver 800 homes master-planned around green spaces, cycle routes, an outdoor gym and children’s play area. The iconic historic “pepperpot” buildings will be home to a café, gym, exhibition space and meeting rooms.

We are in the process of delivering the 125 houses and 349 apartments across 2 blocks. Other, smaller apartment blocks will follow in later phases.

Finance:

As could be expected, there have been bumps in the road. The project had originally been debt-financed by Urban Exposure PLC (“UE”). As many of Qandor’s readers will be aware, as a specialist regional development lender, UE came under real pressure from investors and shareholders following COVID and is now in the process of winding down and delisting from the stock market. As a result, whilst UE provided some short-term support to maintain the construction programme, the joint venture was forced to refinance the project. As a testament to the quality of the project and the delivery team, we received viable term sheets from more than six lenders and successfully closed our new facility in Q4 2020, porting UE’s professional advisors for project continuity and efficiency.

Construction:

More than a year into the project, we are delighted to report completion of the first five houses in recent weeks. James Dickens, MD of Wavensmere Homes, says:

“Despite the pandemic, work continued on site at a fast pace, which avoided any delays to the timeline. We are immensely proud of our subcontractors who have worked so hard to meet milestones despite the challenging year with unprecedented weather and the restrictions imposed by the pandemic.”

Our showcase Pepperpot South has been substantially refurbished and will shortly be launched as an on-site marketing suite with sales and management offices.

The first 5 completed plots, with Pepperpot South behind.

All the Phase 1 houses are wind and watertight and at various stages of internal fix, plastering and decoration. All the Phase 2 houses are now underway, at various stages of groundwork, brickwork and roofing. Work has also commenced on Block A (140 apartments), and Block B (209 apartments) will follow very shortly.

Sales:

Phase 1 of the houses is now fully sold out, and we have taken substantial reservations on Phase 2. Demand has been from a combination of both owner occupiers and investors, the latter being attracted by the projected 7% yields that can be achieved. More than 80 of the 125 houses are now secured or exchanged, with our first completion taking place last week! Our show home has just been completed and the landscaping is now being planted.

Derby:

The City of Derby has bounced back strongly following the pandemic. Over 11.8% of the local Derby workforce is engaged in hi-tech functions, which is four times the national average, and the Centre for Cities has recognised Derby as a top 10 UK location in which to start a business.

Aside from the stalwarts of Rolls Royce, Toyota and Bombardier, in March 2021 alone:

• SmartParc announced a £300m food manufacturing and distribution park close to the city centre which will create 5,000 jobs;

• Europe’s largest industrial developer Panattoni began construction on the 900,000 sq ft development of Derby Commercial Park, having agreed a 371,000 sq ft leasing to healthcare logistics company Alloga UK;

• Lidl announced the development of a 550,000 sq ft Derbyshire bottling plant, hailed as the largest single company investment in the county since Toyota in the 1990s;

• Grainger was reported as being under offer on the city’s first BTR scheme at the Becketwell regeneration scheme.

Overview:

In all we remain confident and enthusiastic for the delivery of the project and the creation of a new urban community. With built product covering everything from 1-bedroom apartments to 3-bedroom houses, we can cater for a broad demographic, and the concentration of outdoor green space so close to urban amenities is well suited for owner and renter requirements given the changes which have come about following the pandemic.

You can follow our progress at https://www.instagram.com/q_derby/