This month has seen CBRE Global Investors, one of the world’s giant real asset investment managers with $104.5bn in assets under management, launch a £250m Affordable Housing Fund. The investments are from 13 institutional investors, including social investment institution, The Big Society Capital. Twelve out of 13 of the investors are new to the affordable housing sector. Coming from the UK and Europe, the institutional investors include “pension funds and insurance companies”. Hannah Marshall, Head of UK funds commented, “If you look at Europe, you can see that for many of the Dutch pension funds, it’s already quite central to their agenda; you can see some of the bigger investors actually implementing targets – wanting to have a certain percentage of their portfolio in impact investment within the next five years, for example.”
The Fund will invest in social and affordable rented housing, shared-ownership properties, homeless hostels and housing for ‘key workers’, such as nurses. It is designed to make a social impact, while targeting a 6% total return. Ms. Marshall stated, ‘Our strategy contributes towards our investors ESG targets, and generates a positive social impact as we invest in the funding of homes for those households unable to afford to rent or buy in the open market’.
The Fund will act as a Social Landlord, leasing the properties to Registered Providers, as opposed to setting up their own RP for now. Investments will be sourced from house builders, individual RPs and Local Authorities and will include “both development and buying existing portfolios”.
Impact investing continues to gain traction among institutions into 2019, and the trend remains for investors and real estate fund managers to explore the opportunity within the social and affordable housing sector in the UK. In December, Legal & General Affordable Homes was granted registered provider status, helping push Legal & General’s affording housing initiatives.
Source: Investment and Pensions Europe