The Exchange Tower
£95m GDV GDV — Build to Rent
£95m
GDV
280
Total Units
56
DMR Affordable Units
32
Levels
2,400 sq ft
Amenity Space
9 months
Planning Consent
The Exchange Tower is a 32-storey purpose-built Build to Rent tower positioned in Birmingham's emerging Eastside district. The scheme comprises 280 professionally managed rental apartments with extensive resident amenities, including a rooftop terrace, co-working space, and residents' lounge. Affintis was engaged to establish a robust viability methodology for this novel asset class in an emerging rental market, and to negotiate an acceptable affordable housing solution with the council.
Client
Midlands BTR Ventures plc
Sector
Build to Rent
Location
Birmingham
Completion
2024
Services Provided
- BTR Viability Assessment
- Methodology Advocacy
- Discounted Market Rent Structuring
- Clawback Mechanism Design
- Rental Market Analysis
Novel BTR scheme in an emerging market with uncertain rental values and a council seeking policy-compliant affordable provision. Birmingham City Council's planning policy had not yet been updated to reflect the specific characteristics of BTR, and the authority's assessors were initially applying a for-sale viability methodology. Establishing the correct return on cost benchmarks and appropriate rent levels for a new market proved contentious.
Affintis led detailed research into comparable BTR developments in regional cities to establish credible Estimated Rental Values (ERVs) and appropriate yields. We prepared a comprehensive position paper on BTR viability methodology, drawing on RICS guidance and appeal decisions to educate the council's appointed advisors. A discounted market rent (DMR) affordable housing product was modelled at 20% of units at 80% of market rent, with a clawback mechanism if rental performance exceeded projections.
Established appropriate BTR viability methodology and secured a discounted market rent solution acceptable to all parties. Planning consent was granted in 9 months. The scheme has since achieved rental values 8% above the ERVs used in the viability appraisal, triggering the clawback mechanism and delivering an additional financial contribution to the council's affordable housing programme.