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Trio of large investors register for-profit providers with RSH
A trio of new for-profit social housing providers have been registered in the past month – including one that has plans to buy £1bn worth of housing association stock by 2023.
AAIM Housing, a new fund backed by finance advisor Centrus, intends to plough pension fund money into acquiring existing social housing through a registered provider listed with the Regulator of Social Housing (RSH) in early April.
The provider is chaired by Keith Exford, former chief executive of Clarion Housing Group, and counts former Sovereign boss Ann Santry among its board members as well as Jack Stephen, former chief financial officer of Thames Valley Housing Association.
AAIM Housing is targeting deals across England in the region of £25m to £100m – which could mean up to 1,000 homes at a time – with a focus on shared ownership and general needs. Management of the homes will usually stay with the current landlord.
Dominic Curtis, chief executive of AAIM Housing, told Inside Housing: “We’ve been looking for quite a while at how we bring in a vehicle which can scale up and bring significant investment into this sector in a format which is familiar to pensions funds.
“You have pension funds looking for long-term investments which are a natural fit for social housing assets, but actually we have very little of that going on in this country.
“Our plan is to do something which is complementary to the existing housing association sector that will last a long time. All the money we invest can then be used by housing associations to fund their own ambitions.”
Phil Jenkins, founding partner and managing director at Centrus, said: “We think it’s long overdue that the wall of pension fund money in the UK is harnessed in a way that is providing good solid returns for pension funds but also providing good-quality, affordable housing as well.”
He added that Centrus will maintain a long-term interest in AAIM Housing, with the fund running on an arm’s-length basis.
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Property investment firm Ashbourne Capital Solutions has registered Preferred Homes Limited with the RSH and has a plan to deliver new extra care developments across England.
Using Homes England grant, it hopes to build 10 schemes – typically of around 80 units each – through land-led development within three years.
The homes will be let through nominations agreements with local authorities, with Preferred Homes retaining and managing them.
Findlay MacAlpine, a founding director of Ashbourne and chief executive of Preferred Homes, said: “We’re looking to bring private sector skills and capital to develop a product which improves on the designs out there to make sure the elderly are better catered for.
“We’ve spent an enormous amount of time with local authorities around England to learn where their needs are greatest.
“Our model is exclusively based on nominations agreements with local authorities rather than the lease-back approach we’ve seen used elsewhere.”
Real estate investment trust (REIT) Residential Secure Income (ReSI) Capital Management has also successfully registered a new social housing provider named ReSI Homes Limited.
ReSI Capital Management and its parent, TradeRisks, were bought out by asset manager Gresham House in early March.
The new entity will sit alongside the REIT’s existing registered provider, ReSI Housing, which is chaired by former National Housing Federation chief executive David Orr.
A spokesperson for Gresham House said while ReSI Housing mainly takes investment from wealth managers, retail investors and institutional managers, ReSI Homes will focus on local government and corporate pension funds.
It will see institutional cash managed by Gresham House to acquire new social housing, with a focus on shared ownership.
Alex Pilato, chief executive of ReSI Capital Management and head of Gresham House’s housing division, said: “Via different funds managed by Gresham House, we are now able to invest in shared ownership and affordable housing across the development cycle and at different return levels.
“This includes taking development risk, acquiring developed open market stock and utilising grants to deliver as shared ownership (such as our first scheme at Totteridge), as well as acquiring retained equity in shared ownership to free up housing association balance sheets to invest in much needed new homes.”
The new for-profit providers are the latest entrants to the sector seeking fresh ways to invest private money in social housing.
In the past 18 months, a number of high-profile businesses and investors have launched social housing arms, including Legal & General with L&G Affordable Homes and Blackstone with Sage.
