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Man Group eyes up further partners after striking 10-year Longhurst lease deal
Investment management giant Man Group is looking to work with up to three more social housing partners in the next 12 months on joint schemes following its lease agreement with housing association Longhurst Group.
Man Group’s private markets investment engine Man GPM announced a 10-year lease partnership with Longhurst to manage 95 homes at Alconbury Weald near Huntingdon in Cambridgeshire, which was acquired by Man Group in March.
Longhurst owns and manages 23,500 homes across the Midlands and the East of England.
Shamez Alibhai, managing director and head of community housing at Man GPM, told Inside Housing that the partnership provides a “blueprint” for working with social housing providers that may have scaled back their own development plans in recent years.
He said that the new for-profit provider is looking at striking three more deals like the Longhurst one in the next 12 months and that it is looking at landlords that may suit it geographically.
He identified four areas that Man GPM would look to work with housing associations in, including Cambridgeshire, Oxfordshire, and along the M4, which goes west outside of London towards Reading.
He said: “I think this is a blueprint that we would like to work on with other housing associations to deliver more housing on the spaces.
“We always intended to enter into operating leases with housing associations. Housing associations are more rooted into communities, in their DNA there is a real sense of social responsibility and a track record of maintaining assets.
“So, from our perspective, they make a very natural partner to our ambitions.”
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The publicly traded investment management firm announced plans to launch its own registered provider of social housing in 2019. It bought the Alconbury Weald site from Crest Nicholson in March this year.
In 2019 Man Group hired Ian Jackson, Longhurst’s former executive director of portfolio investment, and Tom Shaw, Hyde’s former managing director of development, to work as investment directors at the firm.
The partnership with Longhurst will see the homes being delivered under the management agreement and will consist of 64 houses and 31 apartments.
Of these, 29 homes will be allocated as shared ownership, while the remaining 66 will be offered at a discounted rent with a focus on key workers.
Under the terms of the agreement, which has taken nine months to finalise, Longhurst will assume full responsibility for the day-to-day management of the homes, as well as the sales and tenancy process. Man GPM says that this will ensure that tenants and owner-occupiers have one reliable point of contact.
Marcus Keys, executive director of growth and development at Longhurst Group, said: “We are delighted to have confirmed this long-term partnership with Man GPM and we look forward to working together with an ambitious organisation that shares our appetite for growth.
“Assuming responsibility for this additional stock at Alconbury Weald aligns closely with our development strategy and ambition to further grow our footprint in Huntingdonshire.
“Our long-standing vision is to work with like-minded partners, whose values closely align with ours, to respond to local needs by delivering the homes people want, where they are most needed.”
Man GPM said that its community housing fund seeks to achieve the “dual objective of providing both financial returns alongside well defined social and environmental outcomes by accelerating the provision of new affordable homes in the United Kingdom”.
The partnership with Longhurst is separate to its own social housing commitment, but it compliments the hedge fund’s overall housing plans in the UK.
Mr Alibhai also noted that the partnership agreements can allow associations to extend the number of properties they manage without resorting to funding their own capital expenditure, which may have been hit by the costs of improving homes’ fire safety in recent years.
A number of associations have publicly stated that they plan to scale back their development plans over the coming years because of extra costs and the impact of COVID-19.
Mr Alibhai added: “[Forming partnerships] allows housing associations to really achieve their social mission, which is to deliver more affordable housing. And we cannot do it by ourselves; housing associations cannot do everything by themselves. By working together we can take a run at this problem [of the lack of affordable housing].”
This mirrors a wave of similar deals being struck between associations and for-profit providers looking to take the upfront costs away from housing associations.
In March, M&G announced that it had struck a £500m deal with Hyde that would see it forward-fund the construction of 2,000 shared ownership homes. M&G would own the homes, while Hyde would manage and maintain the properties.
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