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Developer to launch new for-profit registered provider
A housing development company has begun fundraising for a new registered provider that will build affordable housing in London and the South East without the use of grant funding.
Developer Value Group has now begun raising capital for its new affordable housing arm, which aims to deliver 10,000 affordable units with £2bn of capital commitments.
Avison Young, which is advising Value on its fundraising, told Inside Housing that the new group is currently in the process of registering with the Regulator of Social Housing and had passed the first stage of the registration process.
Value Group said it would be the first private sector, fully integrated investor, developer and manager to focus wholly on affordable housing. It has 600 affordable units that are already completed or are in development.
Its founder Iskandar Karam said: “For the good of society we have to get the affordable housing sector right. At Value Group we work tirelessly to deliver innovative solutions to our tenants, investors and government bodies.”
The opportunity will launch to market during the second quarter of this year.
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Value Group becomes the latest for-profit provider to enter the market following a flurry of new businesses launched in the past year.
Real estate giant Blackstone found itself caught up in controversy at the end of last year when the government ruled that Companies House had been wrong to allow it to register its new social housing arm, Sage, as a housing association.
The National Housing Federation had expressed concerns that doing so undermined housing associations’ social purpose.
Other large companies – including Legal & General, Grainger, British Land and multibillion-pound property investor William Pears Group – have also launched for-profit social housing divisions.
Richard Stonehouse, principal and head of residential investment at Avison Young, said: “This is a unique and exciting opportunity that will create a substantial and sustainable portfolio of assets, giving the private sector the opportunity to play a significant part in the delivery and management of affordable homes.
“We envisage a weight of capital, both domestic and international, that will be attracted to this opportunity to create demonstrable social value.”
Earlier this year, Avison Young advised on the formation of the Housing Investment Partnership, the £300m joint venture between Morgan Sindall Investments and for-profit provider ReSI Capital Management to fund shared ownership.
