Construction now underway on £139m Bargate Quarter regeneration

Developer, Tellon Capital, and investor, Legal & General, have announced the completion of funding of the Bargate Quarter, the £139m scheme in Southampton, with regeneration works starting immediately.The transaction is on a forward funding basis to one of Europe’s largest asset managers, Legal & General Investment Management (LGIM) on behalf of its Legal & General Retirement (LGR) business. Legal & General will own and operate the completed scheme.The development is built around the City Walls and The Bargate, a 12th Century gatehouse to historic Southampton. It will provide 519 much-needed new homes comprising a mix of studio, 1, 2 and 3 bed units, along with 2,515 square metres of ground floor commercial space.Construction is now underway following a unanimous decision by Southampton City Council’s Planning & Rights of Way Panel to grant permission for the revised scheme earlier this year.Tellon Capital expects the Bargate Quarter scheme to be completed by late 2024 or early 2025.Following LGIM’s first investment in the sector in 2016, its Build to Rent business has grown rapidly. So far this year, it has welcomed the first residents to its flagship Mustard Wharf schemes in Leeds, Box Makers Yard in Bristol, and completed the final phase of The Slate Yard in Salford, plus committed over £150m in investments to Birmingham and Leeds respectively. With a rapidly growing portfolio of over £2bn, and a pipeline to deliver a further 7,500 homes by 2025, LGIM Real Assets remains a leader within the sector.Regarding the £139m deal, Tellon Capital was represented by Lewis & Partners, Colliers, and LRAlternatives, while Knight Frank acted for Legal & General.