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Specialist insurer makes first direct investment in affordable housing of £50m
The Pension Insurance Corporation (PIC) has made its first direct equity investment in affordable housing with a £50m deal to build 125 homes, while targeting up to 1,000 homes in the long term.
The specialist insurer of defined benefit pension schemes said the new investment was part of a “long-term” partnership with London Square, the developer, and Square Roots, its for-profit subsidiary.
PIC said it was aiming to invest £500m over the next five years to build around 1,000 affordable homes.
The firm, which has £44.9bn in financial investments and insures 339,900 pension scheme members, has invested heavily in the affordable housing sector over the past decade.
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It has handed out nearly £4bn in debt funding to providers such as Raven Housing Trust, Housing Solutions, Clanmil Housing and MHS Homes.
However, this is its first direct investment in the sector to develop homes itself.
Under the tie-up with London Square, PIC will initially build 44 flats for London Affordable Rent and 81 flats for shared ownership on a former NHS site in Kingston upon Thames.
London Square will act as the contractor and developer on the scheme, and Square Roots as the registered provider.
Construction has started on the project and is expected to complete in November 2025.
The scheme has received £4.9m in grant from the mayor of London’s Affordable Homes Programme.
Allen Twyning, investment director at PIC, said: “We are excited to be partnering with London Square and Square Roots on this development and our inaugural equity investment in social housing.”
He added: “Not only does this create secure, low-risk cashflows with which we can pay the pensions of our policyholders, but it creates huge social value in Kingston upon Thames.”
Adam Lawrence, London Square’s chief executive, said: “Our new partnership with long-term investor PIC is excellent news for London Square and Square Roots, enabling us to deliver another 100% affordable scheme, making an important contribution to the housing shortage, and creating homes and communities of the highest quality in a well-connected location where people will choose to live.”
Square Roots gained its status as a for-profit provider in June last year. The landlord’s chair is Simon Dudley, the former chair of Homes England.
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