M&G Real Estate has purchased a development site in East London from Telford Homes.

The company sold its Carmen Street site to the UK property investor for £63.2 million, marking Telford's second transaction in the private rented sector.

Full planning application for the site includes a 22-storey tower and 206 new homes, with Telford stating it will sell the 56 subsidised 'affordable' homes in a separate transaction to a housing association.

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Telford said: "The sale to M&G Real Estate is on a forward-funded basis and will comprise an initial land payment followed by regular payments throughout the construction period. Therefore it will not require debt finance with only limited equity to be invested by Telford."

The company added the deal is "just the start of the potential for the private rented sector to become a permanent and more significant part of the group's sales mix."

Chief Executive Jon Di-Stefano said: "Forward funded private rented sector transactions offer strong returns, and we are very pleased to have swiftly secured our second sale in the sector just a few months after the first.

"We hope to extend our relationship with M&G as new opportunities arise and as Telford Homes continues to broaden its sales mix with further de-risked forward funded private rented sector transactions."

(LM)