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Places for People strikes £150m deal with Scottish Government
One of the UK’s largest housing associations has struck a £150m deal with the Scottish Government to invest in mid-market rent properties throughout Scotland.
PfP Capital, the fund management arm of Places for People, plans to launch a new fund on the stock market with an initial investment of £47.5m from the Scottish Government and £10m from one of Places for People’s Scottish housing associations, Castle Rock Edinvar.
It is aiming to raise a total of £150m to locate sites for around 1,000 homes for mid-market rent around Scotland, which it will develop and operate.
The fund hopes to generate returns linked to inflation from rental income on the homes and is planning to target institutional and pension fund investors, with a focus on Local Government Pension Schemes.
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Chris Jones, managing director at PfP Capital, said: “This investment will allow us to operate a strategy delivering a significant number of affordable homes to people across Scotland and we are delighted to work with the Scottish Government on this exciting initiative.
“This fund will also provide a great opportunity for institutional investors to fund the next generation of Scotland’s affordable homes and secure stable, inflation-linked returns.”
PfP Capital has engaged in a variety of unusual initiatives in recent times, including setting up a £550m build-to-rent fund, managing funds for a retirement house builder and buying a regeneration fund.
Scottish housing minister Kevin Stewart added: “This investment will support people on low and modest incomes to access high quality rented accommodation at affordable rates and is one of the many ways in which we are delivering on our target of 50,000 affordable homes by 2021, backed by over £3bn.”
PfP Capital has appointed Noble & Co as financial advisor and placement agent on the launch of the Fund, with Rettie & Co appointed as property advisor to identify suitable mid-market rent investment opportunities.
