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Real estate investor outlines £300m affordable housing strategy
Real estate giant Octopus Real Estate has launched an affordable housing strategy for institutional investors with a target of £300m in commitments throughout the year.
Octopus Investments, part of Octopus Group, said the strategy’s key mission is to deliver more affordable homes amid the ongoing housing crisis, alongside sustainability and energy-efficiency goals.
The firm, which has more than £3.4bn in assets, announced in May that it had acquired register provider Rex Housing, which will allow it to operate a new direct let model alongside housing associations.
In the same month, it revealed that it was in advanced talks with a number of housing associations over potential partnerships to develop affordable homes across the country.
Octopus said this acquisition will ensure the plans are subject to appropriate regulatory oversight and enable the company to draw on grant funding, where appropriate, to support the delivery of new homes.
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In a release, the firm said that the “new homes funded by the strategy will be built to high quality and robust sustainability standards”.
In addition to building homes with as close to zero energy bills as possible, Octopus highlighted how its partnership with its sister company, Octopus Energy, will enable it to build more energy-efficient homes, as well as reduce residents’ outgoings.
Co-investment opportunities will also be available for locally interested investors such as Local Government Pension Scheme.
The strategy will be led by Jack Burnham, who took on the role of head of affordable housing at Octopus in September after leaving Hertfordshire-based landlord Thrive Homes.
Mr Burnham said: “With housing associations searching for alternative funding routes for their development pipelines in the face of net zero costs and increased cost of debt, and local authorities aiming to move back into large scale social housing provision, there is a real need for trusted partners and private capital to step up.
“This is exactly what we are trying to do with our strategy, by helping institutional investors to channel their money into this area. It’s really important to us that the homes we’ll be funding aren’t just affordable at the outset, but affordable throughout their use – we’re not looking to provide a quick fix and walk away.
“Our direct let model means we are heavily involved in ensuring the high quality of accommodation and management.”
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