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Property fund targets £350m investment in two years
Cheyne Social Property Impact Fund is targeting £350m more investment in social housing over the next two years, its portfolio manager has said.
Following its second deal with a housing association – United Communities – to build 161 new homes in Bristol, Cheyne will also look to move more towards housing for older people.
The Bristol scheme included seven different tenures, with 70% let for some kind of sub-market rent.
Shamez Alibhai, portfolio manager at Cheyne, told Inside Housing: “We’re looking to do another £350m over the next couple of years. We’d like to do a little bit more around elderly living. We’d also like to do more mixed tenure.
“The dwellings we built in Bristol offer a very broad range of options to the local community in terms of housing. I won’t be satisfied with what we’ve done so far, I think there’s a lot more to do and the problems are quite acute in this country.”
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The £900m fund was launched in May 2015 using cash from global pension funds and high net worth individuals.
It offers organisations finance based on 20-year lease agreements, with those signing up to it paying index-linked rents.
The lease-based arrangement is similar to that of real estate investment trusts (REITs) in social housing, which have become more common in the past 18 months.
One of the housing associations doing deals with REITs, First Priority, has run into financial difficulties, with the Regulator of Social Housing censuring it for a “fundamental failure of governance” and noting that it did not have the funds to pay its debts.
Mr Alibhai, however, told Inside Housing: “We do not think that lease arrangements with housing associations like [First Priority] are robust enough to support the kind of sustainable returns offered to investors. We have approached that way of working with HAs with caution.”
The only other deal Cheyne has done with a housing association was struck in June 2016, when it signed a leaseback deal with South Yorkshire Housing Association.
Many of its other acquisitions have been specialist or temporary housing leased to charities.
