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Legal & General and NatWest sign 15-year £500m retirement housing partnership
Legal & General (L&G) has entered a 15-year joint venture with NatWest Pension Trustee Limited (NWPTL) to invest £500m in developing retirement communities.
Announced today, the partnership will aim to build around 5,100 homes for people over 65 across 34 different sites, with a gross development value of £4bn when all sites are completed.
All of the sites will be operated and managed by L&G-linked Inspired Villages with a focus on properties for people over 65.
Inspired Villages offers homes starting from £230,000 set within communities designed for the needs of older people and for a net zero carbon basis.
The new deal comes off the back of predictions by L&G that there will be more than 12 million people aged over 65 in the UK and nearly 18 million expected by 2040.
But according to the investment giant, there are currently only around 78,000 later-living homes and some 7,000 new properties being delivered each year.
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Inspired Villages was established by its management team and Legal & General Capital, L&G’s alternative asset platform, in August 2017.
L&G has sold has sold a 50% stake in Inspired Villages’ first 11 sites to NWPTL based on an enterprise value in excess of £300m, allowing it to reinvest equity back into its future pipeline.
Inspired Villages has six villages with 919 residents and four sites under construction.
The investors have committed to back a further 34 sites, which Inspired Villages has in various stages of preparation, which would give it around 5,100 homes that would house an expected 8,000 residents.
NWPTL, which is the defined benefit pension scheme of NatWest, has also committed to acquire all the fully occupied villages outright, though they would continue to be managed by Inspired Villages.
It said this had the potential over time to create an investment platform for other pension funds, allowing pension money to be “deployed at scale in order to match long term liabilities and back great outcomes for later living and UK society”.
Laura Mason, chief executive of L&G Capital, said: “This transaction is unique as it sees one of the largest UK pension funds investing directly into UK private social infrastructure.
"Broadening the range of growth assets that pension money can access is an important step forward for the UK’s growth agenda and economic future, allowing our country’s savings to support the UK in building back better, address climate change and tackle the major issues society is facing. We hope to see further deals like this follow.”
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