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Blackstone-owned for-profit provider signs management agreement with large association
Sage Housing, the registered provider owned by the private equity giant Blackstone, has appointed Places for People to manage its homes across England.
Sage’s business model involves buying up the affordable housing private developers are required to build as a percentage of their total homes under Section 106 of the Town and Country Planning Act 1990.
Blackstone, the world’s largest property investor, bought Sage towards the end of 2017, targeting Section 106 housing. The association now plans to deliver 20,000 homes over five years.
Sage has always said that it did not plan to manage the stock itself but would look to appoint a partner or partners from the social housing sector, and it has now selected Places for People.
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The 60,000-home housing association, one of the UK’s largest, will manage all of Sage’s current housing stock although Sage has not ruled out signing additional management agreements with other associations.
This is not a lease arrangement like some of the models that have recently been seen through real estate investment trusts (REITs) and private funds, which receive payments from housing associations for the homes.
Instead, Sage will simply receive rent directly from the tenants of its homes.
Joe Cook, chief executive of Sage, said: “Sage is built on the understanding that everything we do is about providing an exceptional experience for our residents. As such, we are delighted to be working with Places for People.
“Having Places for People working closely with us to manage and maintain the homes of our residents to the highest possible standards across England enables us to continue to grow and create new capacity in the sector.”
Pat Egan, group director of affordable housing at Places for People, added: “Places for People prides itself on seeking new ways to increase the provision and quality of affordable housing in the UK.
“Sage has created a way to bring investment into the sector and we are excited to partner with them to deliver much needed new, high-quality affordable housing.”
As well as its Section 106 business, Sage has also launched a second business, Sage Partnerships, which will seek to partner with landowners – housing associations, local authorities, the government and private developers – to fund the delivery of new affordable housing.
It told Inside Housing in October last year that it is looking for public land specifically and will operate at a “fairly large scale”.
Update: at 11.33 on 21.1.19 This story was updated to clarify that Blackstone has not publicly stated its targeted yield and that Places for People is not Sage’s exclusive partner.
