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World’s largest property investor enters UK affordable housing market
The world’s largest property investor is to fund a UK housing association in a dramatic entry into the sector.
Blackstone, one of the world’s largest private equity funds, is to fund for-profit Sage Housing Association to buy affordable housing allocations from private developers, targeting a net yield of 5%, in a story first reported by property magazine Estates Gazette.
Blackstone is a multinational based in New York. It has an asset base of nearly $400bn and its chief executive, Stephen Schwarzman, chaired Donald Trump’s Strategic and Policy Forum until it was disbanded last August.
The Wall Street Fund’s rental company Invitation Homes is the largest residential landlord in the US. The fund bought large numbers of homes after prices crashed following the global financial crisis.
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In 2013, it became the first company to issue bonds backed by rental income.
Jonathan Gray, global head of real estate at Blackstone, told IPE Real Assets last month: “We’ve also been active in rental housing around the world where housing supply isn’t keeping up with demand.”
It intends to provide funds to Sage to buy private developers’ Section 106 allocations. Given Blackstone’s size, its support could allow Sage to outgun many other housing associations.
Sage is an unconventional housing association, which, according to its website, has provided homes for “over 100,000 families across the public and private sectors”. It has been registered as a housing association for seven years and is designated as a profit-making organisation.
According to its website, Sage “brings together senior executives from housing associations, the public sector, and institutional residential management to tackle the challenges affecting housing in England”.
“Using a long-term approach and significant new institutional investment, Sage provides quality affordable homes at scale,” its website reads.
The Homes and Communities Agency’s Statistical Data Return reveals that Sage owns no social housing itself. According to the return, it only owns one home, which it rents out on a non-social rent.
Its accounts show that it has £130,578 worth of tangible fixed assets, but its current assets have fallen in recent years, from £217,215 in 2013 to £12,027 today.
All its directors, including chief executive Joe Cook, were appointed in 2017.
Mr Cook was previously executive director of development at 11,000-home association Aldwyck.
Richard Reynolds, who is a director at Sage, was also previously vice-chair of Aldwyck having been appointed in 2007.
