Cubex student deal kicks off living sector push
News: February 2024
Joe Downey speaks to REACT news outlining Cubex’s living sector ambitions, deal pipeline and rebrand plans.
Cubex is not new to residential. The Fiera Real Estate-backed developer has already developed two build-to-rent schemes, but the acquisition of a site in Bristol for a £100m-plus development with family office, Alara Investments, marks the start of a new push into the living sectors.
Joe Downey, managing director at Cubex, says: “We’re making a concerted effort to push into build-to-rent, student and co-living in key locations where we think we can find value and deliver good deals.”
Historically, Cubex is best known for city centre regeneration projects and office schemes, but has been more focused on the industrial and logistics sector in recent years.
Despite the challenges posed by rising construction costs and falling end values, Downey, who joined Cubex in 2021, says the developer’s industrial schemes are proving successful.
“We didn’t get caught up in the excitement over land values. The sites we have bought are all viable and we are building them out,” he says.
The business will continue to focus on the sector, but plans to step up its residential development activity working with Alara and other investors.
Downey says: “We’ve got another three deals under offer for the living strategy, which collectively can provide around 1,000 beds. We want to continue to build the pipeline. There’s no upper limit – we just want to be doing good deals.”
Following Cubex’s first student deal, the next debut is likely to be co-living. The developer is currently looking at a couple of deals that could be suitable, including one where co-living could be built alongside student accommodation and build-to-rent.
The developer is looking at opportunities in Bristol, where it has just moved into new offices in Queen’s Square in the centre of the city to accommodate its growing team. However, it will also look at sites elsewhere in the South West and beyond.
When it comes to student accommodation, and indeed other living sectors, the focus will be on cities with Russel Group universities.
“Bristol will always be our epicentre and we’ll continue doing a lot of deals here, but if we can find the right deals to do in the right key cities on a national basis, then we will do,” says Downey.
Cubex has a strong track record in office development. Its schemes include Halo in Bristol, which was completed in 2022 and achieved a BREEAM Outstanding rating, making it one of the most sustainable office developments in the country at the time.
However, Cubex is unlikely to be embarking on any new deals, not so much because of concern over the occupier market, but rather uncertainty over investor demand and exit values.
At the same time, the company plans to put its expertise to work helping other owners deal with problem office assets. Cubex has previously partnered with institutional investors including M&G and Aviva Investors, providing development management services, and sees an opportunity to step up this work as landlords look to deal with vacant office and retail properties.
“We think we’re well placed to help funding partners to navigate the challenges of sustainable development while trying to extract as much value as possible from their assets,” says Downey.
A rebrand is also on the cards. Exactly what that looks like will emerge later this year, but Downey says the aim is to showcase the developer’s work and put the business “at the forefront of the sustainability drive in real estate”.
It has not been an easy time for developers, but with land prices having fallen significantly and plenty of properties out there in need of repositioning, Cubex is seeing plenty of opportunities to go after.