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Shared ownership provider launched after £405m deal with for-profit and pension fund
A new registered provider of shared ownership homes has launched after a £405m deal with a higher education pension fund and a for-profit provider.
Sparrow Shared Ownership has launched after Universities Superannuation Scheme Limited, the sole trustee for the Universities Superannuation Scheme (USS), acquired more than 3,000 shared ownership properties from Sage Homes.
The USS is the UK’s largest private pension fund, with around £77bn under management.
It is the second-largest deal since Vistry Group’s £580m build-to-rent agreement with Blackstone and Regis, the same large private equity firms that set up Sage in June.
The portfolio, which is located across the UK, consists of shared ownership homes across 250 Sage sites.
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The new provider said the deal also marked the largest acquisition of a portfolio of shared ownership homes since the creation of the affordable housing scheme in 1990.
David Avery, chair of Sparrow Shared Ownership, said: “Thanks to this significant investment of patient, long-term capital from the UK’s largest private pension fund, Sparrow Shared Ownership starts life with more than 3,000 high-quality shared ownership homes that are helping thousands of people across the country onto the housing ladder.
“Our number-one focus from day one is on our residents, and we will be working with Sage Homes to ensure a smooth transition of management services.”
James Seppala, head of real estate for Europe at Blackstone, said the deal will allow the private equity firm to continue to invest capital in Sage Homes to “help alleviate the structural undersupply of housing across the UK”.
Alison Thain, chair of Sage Homes, said: “Several years ago, we started on a journey to attract increasing amounts of institutional investment and capital into the sector.
“For the last three years, Sage has been the largest provider of new affordable homes in England and this investment proves our model, enabling continued growth and delivery of the homes that the country needs.”
Eamon Ray, head of private credit and alternative income at USS Investment Management, said the investment “allows USS to use its long-term capital to support the multi-decade nature of Sparrow’s business plan whilst supporting the UK social housing sector”.
In June, Sage doubled its for-profit providers after registering Sage Green Homes, Sage Places and Sage Shared Ownership with the Regulator of Social Housing.
They were registered on 6 June and the regulator confirmed them in its most recent list of registrations, published in July.
Blackstone entered the UK affordable housing market in 2017, when it launched Sage Homes, a for-profit provider of affordable homes. In 2021, Blackstone and Regis launched Leaf Living, a build-to-rent firm.
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