Managing Director Hampshire & Regional Property Group
Fruit & Vegetable Market site
Quality renting for young professionals is coming to Southampton as the city’s first Private Rented Sector (PRS) scheme becomes a reality. Allan Gordon, Managing Director at Hampshire & Regional Property Group, discusses the opportunities Southampton holds for potential investors.
Southampton’s old Fruit & Vegetable Market is soon to become home to aspiring young professionals who want to enjoy the city vibe in stylish, well-managed surroundings.
They will be moving into one of the 280 modern one and two bedroom apartments at Bow Quarter, the first Private Rented Sector (PRS) scheme in Southampton and developers Hampshire & Regional Property Group hope it will be the first of many in the city centre.
Managing Director Allan Gordon has been making his mark on the city for many years. As a former Director of Bouygues UK, Allan oversaw the building of Southampton’s tallest building, Moresby Tower part of the Admiral’s Quay development at Ocean Village and was proud to be instrumental in developing Southampton Football Club’s state of the art training academy.
Having joined Hampshire & Regional Property Group with fellow former Bouygues UK employee, Shaun Adams, Allan has enjoyed bringing the first PRS scheme to Southampton.
“I joined Shaun at Hampshire & Regional Property Group in October 2014. I spent the first year working with him to get the planning permission for the development of the Fruit & Vegetable Market site.
“Once we had that in place we had to decide how to take the scheme forward,” recalled Allan, who is a Southampton city centre resident.
Identified as one of seven Very Important Projects or VIPs in Southampton City Council’s Master Plan, the Fruit & Vegetable Market site offered great potential but it was not without its challenges.
“The freehold was held by Southampton City Council and there were many complex leasehold arrangements in place. To many developers it was seen as too challenging but Shaun kept working at it until we effectively took control of the site.
“Initially we were looking to work with a housing association to develop the site but with the changes in the way Government was allowing them to operate, we had to look at other options and that was when we decided upon the PRS market.
“It is something that has been around in the US and Germany for decades. The principle being that a development of flats or houses is owned by an investment fund such as a pension fund or a foreign sovereign wealth fund as an asset class.
“Twenty years ago we saw the emergence of student accommodation as an asset class and the same is now true of PRS,” explained Allan.
Recent press articles highlighting Southampton as one of the top 10 cities in the UK for rental yield has undoubtedly made investors take a second look. When Hampshire & Regional Property Group went out to the market with their scheme, they were delighted by the response.
“We had a lot of interest from European and American money. There were half a dozen top investment funds interested in purchasing the Fruit & Vegetable Market site.
“We interviewed a few and picked Rockspring. We had knowledge of them already and knew them to be entrepreneurial and willing to get involved where some funders might not be.
We have sovereign wealth fund money from South Korea and an experienced American operator in the private rented sector called Atlas.
“They operate over 300,000 apartments in America and they are based in Florida,” said Allan.
Hampshire & Regional Property Group is looking at three further development sites in Southampton with the potential for a total of 500 or so further units.
They believe Southampton has a great deal going for it and they have gone public already with a proposed scheme on the corner of East Street and Queensway.
“Southampton has a lot of advantages. It has two universities and a teaching hospital and all three generate a young, highly qualified market.
“We believe developments like ours will help to tackle the issue of retaining talent in the city.
“All the sites we are looking at will be PRS. We have another investor interested and they say ‘The more you can give us, the more we will take’.
“We believe our PRS scheme is the first in the city but it certainly won’t be the last,” he said.