Patrizia and Man GPM, the private markets investment business of Man Group plc, have formed a new joint venture (JV) to invest £100 million in the UK affordable housing sector.
The JV comprises Patrizia’s SFDR Article 9 impact strategy, Patrizia Sustainable Communities, and Man GPM, which has an established presence in the UK affordable housing sector.
Capital for the JV will be provided by Patrizia Sustainable Communities and Man Group, with Man GPM acting as the operating partner through its Community Housing team.
The JV will invest in the development of new-build single-family rental homes to help address the acute shortage of good quality housing for mid-market renters in locations around England where housing affordability is poor. Sustainability is at the core of the platform, with all homes to be developed to a minimum EPC A rating, targeting Home Quality Mark 4 and targeting a zero operational carbon footprint. Each development will also have ecological initiatives and enhance biodiversity and look to make a positive impact on local communities through a combination of innovative environmental and social initiatives.
The JV has already commenced its GBP 100 million investment programme with a commitment to forward-fund the development of 70 new-build homes on long-term affordable rents in Milton Keynes, which is less than 50 miles north of London.
Part of a wider masterplan being developed by a listed housebuilder, the investment will deliver single-family affordable homes adhering to the minimum EPC rating of A and Home Quality Mark 4 target outlined by the JV. There will be open parkland, improvements to communal areas and investment in local community groups, designed to reduce social exclusion, tackle loneliness and foster greater community interaction.
Marleen Bikker-Bekkers, Patrizia Sustainable Communities Fund Manager and Patrizia Global Partners Head of European Investments says: “We are very pleased to partner with Man GPM to launch Patrizia’s impact investment strategy in the UK. Our JV combines deep knowledge of the English affordable housing sector with crucial institutional investment, enabling us to help deliver much-needed and highly sustainable housing for key workers and others on low to middle incomes within the community. By bringing together two teams that are focused on impact, the joint venture has the potential to deliver real social value, as well as attractive risk-adjusted returns, strengthening our purpose of building communities and sustainable futures. The launch of the JV marks an exciting next step in our ambition to house 10,000 people in affordable and social homes through our pan-European impact investment strategy.”
Shamez Alibhai, Managing Director and Head of Community Housing at Man GPM, adds: “We hope this innovative joint venture will set a benchmark for delivering environmentally and socially sustainable housing developments. Our partnership with PATRIZIA is a key part of our ambition to try to address the profound lack of homes in which people can thrive. In the current economic environment, the need for housing options that connect communities has never been greater, so it’s fantastic to have a like-minded partner working side-by-side with our team.”
Patrizia Sustainable Communities is Patrizia’s first SFDR Article 9 strategy fully dedicated to impact investing, with an ambition to provide thousands of affordable and sustainable homes in around 25 European metropolitan areas. To date, the strategy has invested in two affordable and social housing projects in Dublin where it is delivering a pipeline of 1,600 apartments for lower—to-middle income residents.
The JV is dedicated to addressing a number of the most pressing societal challenges in the UK. It is estimated that the completion of new homes is 41% below the government’s target of 300,000 new dwellings per year, with the median rental burden in the private market rising to 37%, more than double the rate of 20 years ago. Nearly 85% of UK building stock is energy inefficient while chronic loneliness is estimated to affect over 3.8 million people.
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