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World’s largest property investor to fund new development of affordable homes
The world’s largest property investor has set up a new company to fund the development of affordable housing in the UK, Inside Housing can reveal.
Blackstone, the American private equity giant, has established a company to fund new build developments 10 months after entering the sector to buy up previously developed units.
Sage Partnerships, a sister organisation to its registered provider of social housing, Sage Housing, will look to partner landowners – local authorities, housing associations, the government and private developers – to fund the delivery of new affordable housing.
The organisation, which will be chaired by Sir Michael Lyons, told Inside Housing that for public sector land specifically, it is looking at “fairly large scale”.
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Sage Housing, which Blackstone acquired a stake in back in January, bids to own affordable housing delivered by private developers as part of their planning obligations under Section 106.
Sage Partnerships, on the other hand, will aim to finance schemes that have stalled or that are otherwise short of money.
Sir Michael, who is also chair of the English Cities Fund, said: “Essentially, we’ll be looking for folks who’ve got land, have got ambition to provide affordable housing, but actually might lack the finance to do that, or might want to bring together a more complex partnership, which requires retaining more expensive, professional skills. That’s where we fit in.”
Sir Michael said there was “no cap” on the amount of investment Blackstone could put into the venture.
The company, headquartered in New York, has £434.1bn of assets under management worldwide.
Sage Housing has committed to buying 20,000 homes over a four-and-a-half-year period, and is understood to be on track to surpass this target. Sir Michael said he thought the new venture would be “getting something of that scale”.
It will primarily target affordable rented and shared ownership developments but did not specify a targeted tenure split.
Craig Horn, head of business development at Sage Housing, told Inside Housing the new company is talking to private developers about converting private schemes into affordable housing, which, he said, could be delivered without grant funding.
On one scheme, he said, which currently has 25% affordable, Sage has suggested providing the finance to deliver 100% of the homes as affordable.
He added: “We’re also talking to large-scale landowners about delivering affordable housing at pace. Quite often, affordable housing at the moment is delivered, potted around over a long period of time.
“We’re saying we can accelerate that delivery by getting involved with the land much earlier, delivering affordable housing much quicker. Actually, that continues to drive that investment through, if there is a market correction or whatever you want to call it.
“Because we have equity investment to deliver affordable housing, we don’t have the reliance on capital receipt from a private sale product. So we can continue to invest.”
